Charitable trust: Has anyone out there set one up before?

I was curious to the mechanics of setting up a charitable trust. Does anyone have first-hand experience or know how it is done?

Nagel
http://finance.webaplex.com

First, what do you want the charitble trust to do?? There are many types of charitable trusts.

I was curious to the mechanics of setting up a charitable trust. Does anyone have first-hand experience or know how it is done?

Nagel
http://finance.webaplex.com




Well, there is a Charitable Lead Trust (CLT) and a Charitable Remainder Trust (CRT).

Generally, the funding asset (e.g., cash, real property, stocks, bonds) are titled in the name of the trust. Consultation with a CPA and attorney are required to ensure that the trust payout, corpus, time, and number of beneficiaries will allow it to qualify under IRS rules, namely that 10% will go to the charity upon the beneficiaries' passing. Most large charities can provide you with an initial illustration, giving you a great idea of what the benefits are.

As you may know, the CRT, which is the most common, has considerable tax, income, and charitable benefits, including a bypass of initial capital gains owed on property used to fund the trust, a significant charitable deduction, and a predictable income stream during retirement years. Additionally, they can be used to reduce the donor's taxable estate for estate tax purposes, so the benefits can be tremendous. The charitable deduction can be taken up to 6 years and can be used in conjunction with Roth conversions should there be any excess deductions (not typical).

The CRT is very flexible: payouts can be adjusted for tax and estate planning, multiple beneficiaries can be benefited for life or for a term of years, they can be made to not give off any income before the property is sold, additional contributions can be made to increase the corpus, etc. They can also be used in conjunction with a Irrevocable Life Insurance Trust to ensure that beneficiaries not named in the trust receive a benefit at the donor's passing, allowing the donor to take advantage of the substantial tax savings and income benefits and benefit heirs.

Most important, the donor will be able to benefit the charity during their life.

In summary, the CRT can have a strong appeal to those concerned about longevity risk, charitable giving, minimizing taxes, replacing low cash flow assets with market returns, and having assets properly managed, etc.

The donor or the charity can serve as trustee, though many people prefer that the charity serve since the assets will be professionally managed. Additionally, most large charities have the assets professionally managed in consideration of the gift.

Go here. . .

http://www.ask.com/web?o=0&qsrc=6&l=dir&q=Setting+up+a+Charitable+Trust