There are a wide range of things that an elderly individual may want to put the money they’ve saved up from years of hard work towards. One such thing is a good cause. Elderly individuals sometimes have the desire to give part of their nest egg to a favorite charity.
Two of the more well-known methods for elderly individuals to make such a charitable donation are to make a charitable gift during their lifetime and to leave a charitable organization a gift in their will. However, these are not the only available options. For example, trusts can be used for charitable giving.
One type of trust aimed towards charitable giving is a charitable remainder trust. In such a trust, after the trust is funded, payments are made to a selected beneficiary (a person can set themselves as the beneficiary) until a certain preset time. When that preset time is reached, whatever is left in the trust goes to the charitable organization that the trust former specified.
Charitable remainder trusts can have various tax benefits. For one, they can sometimes take assets put into the trust out of the estate tax calculation.
Thus, whether a charitable remainder trust would be a better-suited form of charitable giving than the other available options for a given person can depend on their tax situation, their overall financial situation and what tax-related estate planning goals they have.
In such trusts, there are a wide variety of things to be set, including who the beneficiaries are, how much beneficiary payments will be and what time will trigger the stopping of the beneficiary payments and the giving of the remainder of the trust assets to the specified charitable organization. What the best settings of such a trust would be for a person are another thing that is generally heavily dependent on a person’s individual circumstances.
Skilled elder law attorneys can help elderly individuals who desire to give part of their nest egg to a charitable organization figure out whether a charitable remainder trust might be a good form of charitable giving for them. Such attorneys can also help elderly individuals who have decided that they want to set up a charitable remainder trust with determining what trust settings would be most consistent with their overall goals.
Source: FindLaw, “Tax Incentives for a Charitable Remainder Trust,” Accessed June 3, 2015