You’ve likely heard of various charitable trusts mentioned in conjunction with the causes and charities they support. For example, when Microsoft billionaire Bill Gates decided to use the bulk of his wealth for philanthropic purposes, he and his wife created the Bill and Melinda Gates Foundation, a charitable trust.
Though many other charitable trusts were also created by very wealthy people, you don’t have to be nearly as wealthy to establish your own. Let’s take a look at a few common questions about charitable trusts and how they work.
Who should create a charitable trust?
Obviously, charitable trusts are primarily of interest to those who wish to support charitable organizations or causes. Charitable trusts are a good way to both support these causes and to take advantage of tax benefits as well.
Is a charitable trust better than a one-time donation?
Many people choose to give to charity by either making gifts during their lifetime or by providing for a gift in their last will and testament. The charitable trust is a good choice for those who wish to provide ongoing support to a charity, cause, or issues that will likely last for a long time. For those who wish to support individual charities, a one-time gift might be a better choice.
How do I create a charitable trust?
Charitable trusts, like other trusts, specify a relationship between people, organizations, and property. There are different types of charitable trusts, each of which has its own benefits and drawbacks. You’ll want to speak to your estate planning lawyer about the process of transferring property to a trust and choosing what type of trust best serves your goals.