A charitable trust is a type of irrevocable trust and is a specialized tool of estate planning. A charitable trust or charitable remainder trust converts an investor’s appreciated assets into an income stream throughout the grantor’s lifetime without estate and capital gains tax. This type of irrevocable trust is a common tool for carrying out sophisticated estate and tax planning techniques.

A charitable trust gives assets to a designated charity or non-profit organization, which then provides the stream of income to the grantor based on the value of the assets. At the time of death of the grantor, the property reverts to the charity or non-profit and is then sold for the current value. These types of trust are highly effective tools when properly structured and coordinated with the grantor’s overall estate plan. Use a charitable trust to:

1. Eliminate capital gains on assets such as property, stock and bonds.

2. Reduce death taxes paid by your heirs at the time of death.

3. Take advantage of large income tax deductions through charitable trust giving.

4. Provide an income stream for yourself and your loved ones through the charitable trust.

Action Steps
The best contacts and resources to help you get it done

Find charitable trust advice from a charitable trust expert to avoid probate

A charitable trust helps families avoid probate. Because each state has its own rules and laws pertaining to charitable trusts, it's important to get the best advice before deciding this type of trust is right for you. Charitable trusts are complex and subject to both state laws and the IRS tax code.

I recommend: Use Findlaw.com by keying in the words "Trust and Estate" in the legal issue field and then selecting your state to find trust experts near you. Also, try Lawyers.com for state-by-state listings of lawyers who practice in the area of trust and estates.

Create charitable trust documents with online tools and resources

Charitable trusts are tools of complex estate planning. However, it is possible to produce some charitable trust documents with the right online tools and advice. Look for online sources that provide legal document services as well as legal advice.

I recommend: Renaissance is a company dedicated to charitable trust formation with online account services, tools and documents. Lectric Law has online forms available for creating a variety of trusts.

Work with charitable trust experts for tax benefits unique to charitable trusts

A charitable trust offers tax benefits not available in any other type of trust. Charitable trusts help clients avoid death taxes and take advantage of large tax deductions through charitable giving. However, these types of trusts are normally part of extremely complex estate planning. Use trusted experts in charitable trust work for the most beneficial plans available.

I recommend: Both Akerman Senterfitt and Jones Day are nationwide law firms with attorneys specializing in charitable trust management, estate planning and taxation law.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Use a charitable trust to as a way to increase your spendable income through the remainder of your life.
• •  Get charitable trust information before attempting to use any online forms or documents.