Are you someone for whom charitable giving…philanthropy…is a part of who you are? Do you give regularly to charities or important causes? If so, have you consider what will happen to your support after your death? The good news is that with careful estate planning your charitable gifting can continue after your death. In fact, you may be able to combine charitable gifting with non-charitable gifting through the use of a charitable lead trust.
For many people, donating to an important cause is not just done for the tax write off — though the tax benefits of charitable gifting are certainly an added bonus. Charitable gifting is a way to actually make a difference in the world. You may, however, also have family member or other loved ones whom you wish to support as well once you are gone. When that is the case, a charitable lead trust is often the best choice.
A charitable lead trust function just the same as other trusts with regard to the basics. You will need to name a Trustee who will oversee the administration of the trust. You will also need to sufficiently fund the trust with assets. Beyond that, you will actually name at least two different types of beneficiaries – one charitable and one non-charitable. The charitable beneficiary will receive disbursements from the trust for a specified period of time after which the non-charitable beneficiary will receive the remainder left in the trust.
By way of illustration, imagine that you establish a charitable lead trust and fund the trust with $200,000 in assets. You then name your favorite charity as the charitable beneficiary with your two children being named as the non-charitable beneficiaries. Your trust terms might then dictate that your charity receive a $10,000 disbursement once a year for ten years. After the last charitable disbursement, the remaining assets in the trust are to be disbursed, in equal shares, to your two children.
Incorporating a charitable lead trust into your estate plan allows you to provide for a charity that is close to your heart as well as provide for loved ones. In addition, you may also receive a tax benefit for including a charitable lead trust in your estate plan.
If you have additional questions or concerns relating to a charitable lead trust or Illinois estate planning in general contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.
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