HOW TO KNOW IF A CHARITABLE TRUST IS RIGHT FOR YOU

Many people in Florida can leave a legacy through making donations to charitable organizations in their estate planning. Our attorneys at Luis E. Barreto & Associates, P.A., know that setting up a charitable trust can be a wonderful way to benefit not only the organization, but also you. Here is what you need to know about exploring this option.

Florida law notes that the agency you wish to benefit must be a qualified charitable organization. Further, it is possible to create a trust simply for charitable purposes, enabling a court to select the beneficiary that matches your wishes, such as relieving poverty or advancing the arts.

There are two main options for these types of trusts: a charitable lead trust and a charitable remainder trust. In both situations, you would set up the trust and transfer into it the property that will be donated to the organization. A portion of income that the trust generates will be made in a payout, either to you (in a charitable remainder trust) or to the nonprofit (in a charitable lead trust). Upon your death or once a specified amount of time passes, the property in the trust will be transferred to the organization.

There are numerous tax advantages you can reap from creating this type of trust, including the following:

  •        Once the property passes to the nonprofit, it is not included in the assets that count toward any applicable estate tax.
  •        You can take an income tax deduction spread out over five years based on your gift minus any payments you may have received from the trust.
  •        If you use highly appreciated assets, such as stock, you may be able to save on capital gains taxes.

Typically, these trusts are most beneficial for people who are making significant contributions. People making smaller gifts may be able to work with an estate planning attorney to develop another course of action for their contributions. For more information on this topic, please visit our page regarding trusts in Florida.

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Written by Luis E. Barreto

Luis E. Barreto

Luis is a probate and guardianship litigator with over 23 years of experience in the field. Determination of heirs, will contests, breaches of fiduciary duty, removal of personal representatives, guardians and trustees are just some of the types of litigation he addresses. In addition, he administers non-contested estates and guardianships.