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.
