At Profit Law Firm, a Maryland estate planning attorney will help you create estate plans that promote your legacy through charitable giving. Estate planning that utilizes charitable gifting strategies may save capital gains taxes, increase income, and provide you, or whomever you designate, with an income for life. These types of gifts may even provide an estate tax deduction — an important consideration in planning your estate.
If given the choice between paying taxes (involuntary philanthropy), or making a charitable gift (voluntary philanthropy), most people would choose the latter, because it gives them the benefit of knowing who the money will benefit and how it will be used. By creating an estate plan you can customize a donation to a charity that allows you full control over what happens to your hard earned assets. We help clients make charitable gifts and practice good stewardship in the most tax-efficient manner.
Charitable Remainder Trust
Our estate planning attorneys can assist clients who desire to leave philanthropic legacies through the sophisticated use of trusts. Clients may be inclined to use a Charitable Remainder Trust, which is an irrevocable trust that cannot be altered. A Charitable Remainder Trust provides income for you and your loved ones, for a specified period or a lifetime. After you pass away, the remainder of the assets in the Charitable Remainder Trust are then designated for any noble charity, cause, organization or institution you choose.
By first dispersing the assets to the beneficiaries specified in the trust over a certain period of time, and then donating the rest of the assets to charity, a Charitable Remainder Trust can offer an opportunity to reduce taxes and generate income while achieving philanthropic goals. Creating a charitable remainder trust has some restrictions and can be executed through either a Charitable Remainder Annuity Trust (CRATs) or through a Charitable Remainder Unitrust (CRUTs). These are complex instruments and the attorneys at Profit Law Firm can help.
Charitable Lead Trust
The Charitable Lead Trust is similar, but this trust provides income to your chosen charity or cause, and then the assets that remain after your death are passed to your heirs.
Both trusts require careful consideration of numerous factors to ensure that this type of legacy planning accomplishes the objectives of the client. In particular, the amount of distributions, the timing of distributions and the terms governing the usage of these distributions can have a huge impact. Finally, the philanthropist can determine any restrictions that should be placed upon the transfer of assets from the trust to the charity or heirs, and what circumstances would warrant an asset being taken back into the trust or reverting to the heirs.
Our team is willing to walk with you through the differences in the charitable remainder trust and the charitable lead trust to help you decide which trust will help you meet your charitable objective. We can then go through scenarios to draft the charitable remainder trust or charitable lead trust with the right terms to honor your compassionate decision to give.