For many people, it is not enough simply to leave an inheritance to their loved ones after they are gone. Some wish to make a lasting impression by leaving a portion of their estate to a charitable cause. If you are like many Miami residents, you may have worthy hobbies, passions and beliefs that can be benefited by your generosity. It is possible through a charitable remainder trust to leave behind a sizeable amount of your estate to a worthwhile cause.
According to Bankrate, you would enact a charitable remainder trust after setting up the terms. The property you wish to donate would be transferred to the charity, which would then serve as a trustee. The charity would then invest or manage this property so it generates an income. This would then be paid to you or a beneficiary you designate for a specified number of years or until you die; at this time, the remainder of the property belongs to the charity.
There are a few points regarding charitable remainder trusts you should understand:
- They are irrevocable, meaning you give up your right to the property and cannot reverse the trust once it is put into action.
- The charity you choose must be approved by the Internal Revenue Service.
- Such a trust may not be worthwhile for smaller amounts.
One benefit to setting up a charitable remainder trust is that it has numerous tax advantages. It would be exempt from federal estate tax, and you would be able to claim an income tax deduction. This blog post is meant as general information and is not to be taken as legal advice.
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