I Want to Give My Estate to Charity – How Do I Do That?

Friday, August 31st, 2018, 12:23 am

If you don’t have anyone to leave your estate to or believe strongly in a specific charity, you can leave your estate to that charity. This involves creating a charitable remainder trust or CTR. While a CTR is similar to other trusts in some ways, it does have a few notable differences. For one, it does allow you to take advantage of tax exemptions that come with charitable giving. These exemptions mean that the government will be unable to tax your estate as it normally would. But how do you create a CTR?

Learn About the Two Types of Charitable Trusts

The first thing you need to do is decide which type of CTR is right for you. The first type is called an annuity trust. This type of CTR generates income every year based on a set percentage of the fair market value of the trust. If the value of the assets you’ve placed in the trust will not change, this is likely your best option. However, the income rate will never change to keep up with inflation. An annuity trust set at five percent will remain at five percent for as long as the trust exists, even if that amount no longer covers the costs it originally did.

The other type of trust is called a Unitrust. This is a riskier type of trust, but it does provide more flexibility. The assets are valued once a year, and the trust pays out a percentage that is representative of the current market value. This means the percentage can grow every year if the market grows. If the market does not, the payouts remain the same or may even decrease.

Getting Started

To begin setting up a charitable remainder trust, you first need to create a list of all of the assets you have that will go into the trust. This can include real estate, bonds, stocks, cash, and a number of other assets. You also need to consider if you want the trust to generate money in perpetuity or if you want it to expire after a set number of years.

If you’re interested in creating a CTR or exploring one of the other options such as foundations or charitable lead trusts, the firm of Michael F. Kanzer & Associates is here to help. Contact us today to discuss your estate.

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Category: Estate Planning, Trusts Planning, Uncategorized


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