At the end of a calendar year, a Torrance resident may take stock in where they have spent their money and what they need to do to save for the future. This is often the result of looking at one’s earnings and how they might be affected by federal and state taxes. For some, a surplus of income may mean looking into options that include giving to organizations and individuals that can benefit from financial support.
Charitable giving is a big part of many Californians financial planning. This is because many important social programs cannot run without patronage. As such, individuals may choose to give to charities when they are alive and through their estate plans.
A charitable trust is one that is created for the benefit of a charity. There are different forms of charitable trusts, such as charitable lead trusts and charitable remainder trusts. While charitable lead trusts benefit charities first and default to non-charitable beneficiaries after a period of years, charitable remainder trusts first benefit non-charities and then benefit charities once the periods of support to the non-charities expires.
Charitable trusts often cannot be terminated, so it is important that individuals fully understand the ramifications of their actions before putting them into place. While a charitable trust may help a person meet their goals of giving to others in need and reducing the size of their estate, they may not serve their creators’ interests if they are funded too soon. To learn more about charitable trusts, readers should discuss their estate planning options with their attorneys.