When you establish a charitable trust, you can leave stocks, bonds, real estate and cash to your family and beneficiaries even as you support one or more nonprofits.

You may customize a trust to suit your personal priorities. This versatile estate planning solution minimizes tax obligations while helping to ensure that your last wishes become a reality.

Benefits of Charitable Trusts

Charitable trusts have the potential to reduce estate, income, capital gains and gift taxes. They also offer flexible options. This financial tool yields both short- and long-term benefits. It safeguards your assets while giving you the freedom to select a different recipient in the future. The tax savings multiply when you contribute assets that gain significant value.

Things To Consider

You can choose between two major forms of philanthropic trusts. A charitable lead trust produces interest based on the value of the assets that you devote to it. The trust will pay this revenue to a selected nonprofit until its term expires. These accounts usually remain open for one to two decades. After expiration, family members receive the assets and normally face little or no estate and gift taxes.

An alternative is to create a charitable remainder trust. You can contribute securities to it without paying capital gains tax. Additionally, you might qualify for a deduction on your income taxes. A family member receives the interest rather than a nonprofit, but the charity acquires your assets when this account expires. Some remainder trusts permit you to deposit more cash or securities in the meantime.

Who Is It For?

Charitable trusts yield valuable benefits for a wide range of individuals, yet it’s crucial to realize that you can’t withdraw the assets at any time. You must retain adequate savings to guarantee financial wellbeing. This solution works best for excellent results for families who expect their securities to gain value and trigger sizable estate taxes in the future.

You can rely on our accomplished professionals to help you choose the suitable type of trust or another advantageous form of philanthropy. We have the skills and knowledge needed to set up and manage a trust as well. Our advisors take the time to provide personalized professional guidance as you develop a plan that aims to maximize philanthropic giving and tax deductions while ensuring your family’s long-term prosperity. Please feel free to reach us to benefit from the expertise and resources of a financial planning firm with over three decades of experience.

Pence Wealth Management and LPL Financial do not provide legal or tax services. Please consult your legal advisor regarding your specific situation.