In a charitable trust, the property remains technically owned by the donor but the recipient keeps possession and control over it. A charity is the trustee who is free to use the money for any reason explained in the trust agreement, which is usually towards advancing the organization’s charitable mission. If you are considering forming a charitable trust, speak with a reliable Las Vegas attorney from our firm to help you set up a trust that accurately reflects your wishes.
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A charitable trust is an admirable means of contributing to the community while being a good way of reducing both income and estate taxes for the Trustmaker. Substantial gifts to charity can reduce the taxes the rest of your estate is subjected to when you die.
You can choose two different sets of beneficiaries for your charitable trust:
- Friends and family members
- Charities or foundations of your choosing
- The IRS
It should be noted that there is no FDIC protection or government guarantee on charitable gift annuities, meaning if the charitable institution runs out of money and files for bankruptcy, you will lose out on any future annuity payments.
Types of Charitable Trusts & Gifting
A charitable lead annuity trust gives you a means of making a large gift to charity, getting a tax break, and eventually leaving assets to family members. You can also set up a charitable remainder trust and transfer to it the property you want to donate to a charity. The charity, however, must have tax-exempt status according to the Internal Revenue Code.
The charity can serve as a trustee of the trust and manages or invests the property so it will produce income for you, and at your death, the property goes to the charity. Pooled income charitable trusts are another option which allow a charity to set up the trust and then accept donations which are much smaller than a trust founded by an individual.
Gifting to a charity needs to be done according to certain regulations and our Las Vegas charitable trusts lawyer is ready to help you in this process.
How to Set Up a Charitable Trust in Nevada
In order to create a charitable trust, you will need to work with a professional to help ensure that your trust is properly set up to serve your needs. An estate planning attorney can help you set up your trust by following these steps:
Determining which assets you want to add to the trust. Your donations are irrevocable so it is important to plan this out carefully.
Deciding on your beneficiaries and whether you want the income in the trust to pay them or the organization first. Also take into consideration your tax deductions.
Draw up your trust document with your attorney. At this time you will be able to move assets into the trust, unless it is part of your will.
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