Instead of leaving everything to their family members, many people in Colorado leave a portion of their estate to their favorite charity. Forming a charitable trust is a great way to support your favorite cause long after you’re gone, and it also comes with a set of tax incentives. However, there are other benefits of forming a charitable trust that you might not be aware of.
What are the advantages of forming a charitable trust?
During the estate planning process, you’ll have to choose a beneficiary if you’re creating a regular trust. A charitable trust is one of the few exceptions that doesn’t require a beneficiary. Instead, you’ll name a purpose that you want your wealth to go towards. With charitable trusts, the general public is automatically assumed to be the beneficiary.
Charitable trusts can also last much longer than traditional trusts. While the law requires most trusts to have a limit, charitable trusts can theoretically go on forever. Charitable trusts have different laws governing them because they help the general public, not a few specific individuals.
Finally, a charitable trust is one of the few assets that is modifiable after your death. Most trusts are irrevocable — if something goes wrong, your relatives can’t do anything about it. However, a judge can modify your charitable trust to ensure that it continues helping members of the community. If you anticipate that someone will need to modify your trust, you can leave instructions in your will.
Both charitable and non-charitable trusts have many benefits for the person granting the bequest and the beneficiaries. You could talk to an estate planning attorney for more information about how trusts might accomplish your goals.
Should you place your assets in a trust?
Creating a will may sound like a simple matter of writing down your assets in a document and explaining how you want the executor to distribute them. However, estate law is actually much more complicated than that. An attorney could help you write a comprehensive estate plan that distributes your assets according to your wishes and eliminates the need to put your estate through the probate process.