There are many types of trusts that can be used in estate planning in New York, and one of the most popular ones is the charitable remainder trust. This type of trust works for those who want to give back to the community, while also leaving money for their heirs. Read on to learn more.
What is a charitable remainder trust?
A charitable remainder trust is a type of trust that allows you to donate money or assets to a charity, while still receiving income from those assets. Your heirs then get the remaining assets to your heirs after you die. This can be a great way to give back to the community, while also providing for your loved ones after you’re gone.
What are the benefits of a charitable remainder trust?
The biggest benefit is that you’ll be able to provide for your loved ones and give back at the same time. You won’t have to worry about paying any capital gains tax, which can save you money in the long run. And because you’re donating assets while still receiving income from them, you can take a charitable deduction on your taxes.
How does a charitable remainder trust work?
When you set up a charitable remainder trust, you’ll need to name a trustee who will manage the trust and distribute the assets to your heirs after you die. The trustee can be either an individual or a financial institution, but you need to remember, that implementing your wishes concerning such trusts, charitable giving and tax planning can be a complex process. You’ll also need to name a charity that will receive the donations. The trust will distribute the income it earns to you or your heirs, and when it’s eventually dissolved, the assets will go to the chosen charity.
If you want to donate your wealth while also providing for your loved ones, a charitable remainder trust may be the right option for you. Just remember to go through other estate planning options as well to make sure your estate gets handled in the way you want.