Modern Estate Planning Blog

As a trust attorney in Sacramento, I’m often asked by clients how to best support the charities and organizations they hold near and dear to their hearts during their lifetime and perhaps after their death.

In my opinion, if there is an organization or charity that you support financially, it’s often a good idea to set up a charitable trust.

A charitable trust is a tool that allows you to give money, or better yet appreciated assets, to an organization whose work you admire and support, but it can also help you reduce your estate taxes at the same time.

I want to keep this simple, but essentially, there are two types of charitable trusts.

The first is a Charitable Lead Trust.

A charitable lead trust is used to make a series of payments to a charitable organization while you are alive. Then upon your death, the remaining assets in the trust are either given back to you or transferred to someone else that you select as beneficiary.

The second type of trust is a Charitable Remainder Trust.

In this type of trust, you create two sets of beneficiaries known as income beneficiaries and remainder beneficiaries.

The income beneficiaries, who are typically the trust owner and his family, will receive income from the assets in the trust during their lifetime. Then once all the income beneficiaries die, the remaining assets are given to the charity of your choice, who is the remainder beneficiary.

And of course the beauty of this option is that it misses estate taxes entirely.

However, I do want to make clear that while this is a simple explanation of charitable trusts, these types of trusts are actually quite complex. So if you are interested in setting up a charitable trust to benefit your charity or organization of choice, I’d advise you to contact a qualified trust attorney in Sacramento and a tax professional who can guide you through the process.

Fortunately we’ve made the process of working with a trust attorney Sacramento easier than ever by opening up 10 free Peace of Mind Planning sessions free of charge (normally $750) each month. To reserve your spot, simply call our Gold River office at (916) 241-9661.