Florida Charitable Trusts Decoded
It is very common for those planning their estates to want to give some of their assets to a charity or charities that they support. However, simply establishing an amount in your will is not necessarily the best way to give; too much can change in Florida probate and too many other people can seek to make changes to the bequest. More and more people are instead opting for charitable trusts, which preserve the gift to the charity and allow for more autonomy in how or when the gift is given. If you are planning your estate and need advice on charitable trusts, contacting an experienced attorney is a must.
Must Benefit A Qualified Charity
A charitable trust can be structured so that both your family and your chosen charity benefit. In order to establish one, however, certain criteria must be met – namely, the charity must be a 501(c)(3) organization, which means that it must be solely established for charitable, non-profit purposes. More specifically, no earnings from the organization may benefit any private individual, employee, or shareholder. Florida law also encourages the use of charitable trusts, citing giving to charity as an interest that the state should help perpetuate.
There are many different reasons why people choose to give to charity, with some good, some more self-interested; one of the major advantages of any trust as opposed to a standard bequest in one’s will is the ability to avoid certain types of taxes. Trusts are seen as separate entities from their settlors (creators), meaning that the settlor can take an income tax deduction for any assets that they transfer into the charitable trust. Charitable trusts can also give a settlor the chance to avoid capital gains taxes, which in turn means that their estate may have more in it to give at a later date.
Split Interest Trusts & Private Foundations
There are two common types of charitable trusts, which are essentially mirror images of each other. A charitable lead trust is one where a chosen charity will receive the yearly income from the trust, but upon the settlor’s passing, their personal beneficiaries will receive the remainder of the estate. A charitable remainder trust, as one might imagine, grants the yearly income from the trust to the settlor’s beneficiaries, with the remainder of the trust going to the chosen charity after the settlor has died. These are sometimes referred to as split interest trusts. Both have advantages and disadvantages, and it is always best to consult an attorney before deciding which is best for you.
Contact A Florida Estate Planning Attorney Today
In this day and age, more and more people are gifting some of their assets to charity and doing so can be a positive for both your chosen charity and your beneficiaries. If you have questions about charitable trusts, contact a Naples estate planning attorney at Nici Law Firm who can help answer those questions and work with you to ensure that your wishes are honored and protected. Call us today at 239-449-6150 or use our web form to schedule an initial consultation.