Charitable Trusts and Foundations

May 14, 2018 — by John Conger
Tags: Divorce

Estate planning consultationThere are many factors that need to be considered in estate planning cases. At Shore, McKinley, & Conger, LLP, our experienced attorneys offer a comprehensive range of estate planning services. Our attorneys can be of particular assistance when setting up charitable trusts and foundations. 

Charitable trusts and foundations allow our Stockton, CA and Sacramento, CA clients to donate their money and control how their money will be spent, even after they pass on. There are many benefits to creating charitable trusts and foundations, but it is important to work with an experienced attorney so everything is handled properly.

Setting Up a Charitable Trust or Foundation

Setting up a charitable trust or foundation is not the right option for everyone. The creation of a charitable trust or foundation requires a big financial commitment. However, if clients have substantial assets, are interested in controlling how those assets are spent, and how they will be divided, a charitable trust or foundation may be the best option. 

Setting up a charitable trust or foundation involves some important steps, including:

  1. Determining what portion of money or assets will be placed in the account (once assets are placed in a charitable trust or foundation, they cannot be removed)
  2. Appointing beneficiaries to the account and deciding how distributions will be set up
  3. Deciding how money in the trust will be invested
  4. Having all legal paperwork drawn up, signed, and notarized

Benefits of Charitable Trusts and Foundations

Charitable trusts and foundations can be beneficial to those with substantial wealth and assets. Charitable trusts and foundations allow people to continue to contribute to charities of their choosing even after they have passed away. 

In addition, charitable trusts and foundations provide numerous tax benefits, which allow people to allocate their money to be spent where they want it, rather than having to spend it on taxes. 

Following are some of the greatest benefits of charitable trusts and foundations:

  • All assets given to the estate, including property, will be excluded as taxable assets
  • There are no capital gains when assets are sold by a foundation
  • Charitable foundations can be run by anyone of your choosing (including children or other family members), and they can be paid a salary
  • A charitable trust allows a noncharitable party (such as a family member) to receive a portion of the donor’s assets, either as income interest, or in a lump sum at the duration of the trust

In all, charitable trusts and foundations protect the value of assets, reduce taxes, and allow a person to continue to be charitable with their funds long after they are gone. 

Learn More

Charitable trusts and foundations can be set up while a person is still living, or after they have passed away, so it is never too soon to start estate planning. If you are interested in playing an active role in how your assets will be divided after you are gone, contact us at your earliest convenience to learn more about charitable trusts, foundations, and other estate planning.