Charitable giving is a major part of estate planning for many people. It provides you with an opportunity to support a cause you care about while also potentially offering some estate planning benefits as well. A charitable lead trust in Atlanta is one of the most efficient ways to accomplish this goal.
When you create a charitable lead trust, you essentially allow a nonprofit or other charity to receive the income from those assets for a set period of time. Eventually, that property goes back to you or your heirs. Setting these up can be complex without the support of a dedicated trusts attorney, so we recommend that you schedule your strategy session with Siedentopf Law as soon as possible.
What is a Charitable Lead Trust?
A charitable lead trust is one of two common ways to use trusts to support nonprofit entities as part of your estate plan. They are useful for providing a cause that you care about with resources over a set period of time, without costing your heirs the bulk of their inheritance.
With a charitable lead trust, you transfer assets that are likely to earn income to the trust. Any interest generated by the trust is paid out to the charity as a gift. This can go on for years or even until your passing. At some point, the remainder of the trust is either returned to you or passed down to your beneficiaries.
There are several reasons why a person in Atlanta might want to include a charitable lead trust in an estate plan. For starters, it might provide you with tax benefits by reducing your income or avoiding the capital gains tax. For most people, the primary benefit is to offer financial support to an important cause, like a public university or nonprofit institution. This approach can also help strengthen your legacy and provide you with a measure of control over how these assets are used, even though they are no longer in your control.
Trust Formation
Before this process begins, you will need to select either a charitable lead or remainder trust. Lead trusts are a good option if you have assets that are likely to earn substantial interest in the years to come.
Next, you will need a trustee. This individual or entity is tasked with managing your trust and investing the assets transferred to it. Your trustee might be a person you know, or a financial institution could serve in this role.
Trusts require paperwork before they are formalized. Our Atlanta attorney can draft trust documents on your behalf outlining the terms, beneficiaries, and how assets are distributed when the charitable lead trust disbands. Ultimately, filing paperwork with the IRS will also be necessary for tax purposes.
Finally, the trust must be funded for it be operational, which means transferring ownership of assets like cash or securities to the trust. This entity is then the legal owner of that property, even though the way you set up the trust still ensures your wishes will be followed.
Speak with an Attorney in Atlanta About a Charitable Lead Trust Today
If you are considering a charitable lead trust in Atlanta, now is the right to time to have an estate planning lawyer help you explore your legal options. It is crucial to comply with every requirement during this process or risk the trust being found invalid in the future. Reach out to Siedentopf Law right away for a strategy session to learn how we can help.
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