Explore the Potential of Charitable Trusts

Nancy E. Tomasich, ChFC®, SE-AWMA™

November 25, 2024

Are you looking to make a lasting impact on causes you care about while also gaining tax benefits? Charitable trusts may be the solution, offering a way to align your philanthropy with financial goals.

What Is a Charitable Trust? A charitable trust is a legal arrangement where assets are managed by a trustee for the benefit of charities. It can be a valuable estate planning tool, helping you support charities while also providing for your heirs.

Types of Charitable Trusts:

Charitable Remainder Trust (CRT): Provides income to you or your beneficiaries for a set time, with remaining assets going to charity.
Charitable Lead Trust (CLT): The charity receives income first, and the remaining assets go to your heirs.

Benefits:

Tax advantages: Potential for income tax deductions.
Income stream: CRTs offer income for you or your beneficiaries.
Philanthropic impact: Contribute to causes you care about.

Considerations:

Irrevocable: Once set up, charitable trusts cannot be changed.
Management: They require ongoing administration.
Heir impact: CRTs may reduce inheritance.

If you're in a high tax bracket or want to create a philanthropic legacy, a charitable trust might be a good fit. Contact us to explore how this strategy can be tailored to your financial goals.

This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera nor any of its representatives may give legal or tax advice.

Such trusts are used to develop a vehicle for donations to a favorite charity, which also allows for the reduction of income taxes through a charitable deduction and favorable tax treatment at the date of the gift by non-recognition of built-in capital gains.

The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing such strategies.