Another great way to accomplish a charitable legacy and receive significant estate tax benefits is by using charitable trusts. Planned gifts to charity are deductible without limit and reduce the taxable estate. There are two main types of charitable trusts, Charitable Remainder Trusts (CRT) and Charitable Lead Trust (CLT), that are outlined below.
The Charitable Remainder Trust
A Charitable Remainder Trust (CRT) is a common and effective estate planning tool. A donor may use a CRT if they would like their up-front interest to go to a non-charitable beneficiary (such as a spouse or other family member) and the remainder to a charity. The CRT is an irrevocable trust that is tax-exempt and may be useful to defer gain on an asset.
The Charitable Lead Trust
A Charitable Lead Trust (CLT) is also an irrevocable trust but the lead interest goes to a designated charity and the remainder to a non-charitable beneficiary.
There are many different options for charitable estate planning. Please speak with your professional advisor to learn more about the options that would work best for you. For more information about estate planning available through The Community Foundation, please see our Toolkit or contact Donor Services at donorservices@cfsloco.org or call 805-543-2323.
