Charitable planning can ensure the maximum portion of your gift goes to the charity or charities of your choice, as it can allow deductions on capital gains, estate, and income taxes. If you intend to leave a legacy by supporting charities that are the most meaningful to you, read on to find out how one of the experienced New York City trust attorneys at Zimmet Law Group, P.C. can help you navigate through the different charitable planning options and strategize the best plan for you.
What are the benefits of a trust?
A trust is an alternative way to pass assets to a beneficiary. The benefits of a trust include the following:
- Probate avoidance: Probate, a lengthy and costly court proceeding, often takes place during estate administration. However, it can be avoided through the use of one or more trusts in your estate plan.
- Tax reduction: Trusts can help you reduce estate and gift taxes on your estate. This leaves more to the chosen and, in some cases, protects assets from creditors.
- Control over disbursement: With a trust, you have more control over asset disbursement than a will would provide. A trust can reduce the chances of a beneficiary engaging in poor financial decisions and harming their inheritance.
What are the different types of charitable planning?
Charitable planning can be done through the use of a trust. Specifically, a charitable remainder trust creates an income stream for a specified number of years that benefits you or a different noncharitable beneficiary, and any remaining assets go to the charity or charities of your choice. This is different than a charitable lead trust, which creates an income stream for a specified number of years that benefits the charity or charities of your choice, and any remaining assets in the trust can be passed down to your children or another noncharitable beneficiary without incurring gifts or estate taxes.
Charitable planning can also be executed through a donor-advised fund, which can allow you to maximize income tax savings on weekly or monthly donations to the charity or charities of your choice. A private foundation, on the other hand, allows you to specify and control how your gift is used by the recipients of your generosity.
If you have any remaining questions regarding charitable planning, do not hesitate in reaching out to one of the skilled New York City wills, trusts, and estates attorneys today who will help you in deciding which charitable planning avenue is right for you.
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