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Law Offices of Roshni T. Desai
Long-term Planning For Orange County
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What is a charitable trust?

If you are one of the many Californian for whom charitable giving is a way of life, you may wish to look into establishing one or more charitable trusts to benefit your church, your favorite charity, your alma mater, etc. The beauty of a charitable trust is that it likewise can benefit you as well.

As fidelity.com explains, the unique thing about a charitable trust is that while it gives you the chance to give back, it also gives back to you. This is because you can split the trust assets from their income, giving one to the charity and the other to a noncharitable beneficiary, including yourself. You likewise can name yourself as trustee.

Personal benefits

You gain many benefits from your charitable trust including the following:

  • You choose which assets to place in the trust
  • You continue to maintain control over those assets
  • You choose how to distribute the assets themselves and the income they produce
  • You gain possible substantial tax benefits
  • You get the satisfaction of “giving back” according to your own goals and objectives
  • You choose how long the trust lasts

Charitable lead trusts versus charitable remainder trusts

The other choice you get is whether to establish a charitable lead trust or a charitable remainder trust. If you choose the former, your charitable beneficiary receives the annual income from the trust. When the trust ends, you or your other designated noncharitable beneficiary receives the trust assets. A charitable remainder trust works exactly the opposite. Here you or your other noncharitable beneficiary receives the annual income produced by the trust assets, and at the end of the trust period, the charity gets the assets themselves.

While this educational information is not intended to provide legal advice, it can help you understand charitable trusts and the benefits you receive by establishing one or more of them.

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