Many estate plans incorporate charitable contributions for philanthropic, asset protection, and tax purposes. There are a number of ways this is done, including contributing assets to charitable trusts and establishing charitable foundations. These each have their own specific benefits and structural nuances, but each must fall within IRS regulations to be truly beneficial. Otherwise, fraud lawsuits, litigations, disputations, and other legal entanglements can easily result.
Hart & David Law provides the proven legal expertise you need to protect your assets by effectively incorporating of charitable foundations and trusts into your estate plan.
Charitable Remainder Trust
Charitable remainder trusts, or CRT’s, provide a way for you to transfer appreciated property while obtaining revenue from your assets and reducing taxes. It allows you to sell assets, such as stocks and real estate, without capital gain. You still reap income from it over time as the assets are managed by the trust. Once you pass on, assets are distributed to the charities you designate.
To be used properly, a CRT must be fully compliant with IRS policies as well as have the correct structuring. Our attorneys can help you structure the trust in a way that allows for various benefits, including:
- Elimination of capital gains taxes from the initial transfer
- Charitable contribution tax benefits
- Continuing income for you, your spouse, and even other beneficiaries
- Proper distribution of assets upon your passing
Our legal advising services will help you through all stages of setting up your trust so as to prevent disputes or complications with tax laws later on. Whether you need to set up a charitable remainder annuity trust (CRAT) or a charitable remainder unit trust (CRUT), Hart & David can provide the advising and representation you need.
Charitable Lead Trust
In a charitable lead trust, a portion of the assets given to the trust are first donated to designated charities. After a specified period of time, the remainder is then transferred to them. This helps reduce taxes on your estate when you pass away while also helping lower gift and estate taxes for the beneficiaries. Again, the right structuring, drafting, and designations are legal-intensive matters. Therefore, legal advising is crucial to setting up a CLT correctly.
Establishing a private charitable foundation allows you to contribute toward causes of your own selection. Alternatively, you can leave donation decisions to the foundation itself. In either case, it must comply with IRS policy in doing so.
A correctly structured foundation will help reduce taxes from capital gains, estate, and income. However, if it is improperly structured or does not adhere to federal regulations, it can result in capital losses, lawsuits, and litigation. When you enlist our legal services, you ensure that your charitable contributions go to the organizations you desire while also providing you with the needed benefits.
Legal Advising and Assistance
Hart & David helps private clients throughout the Chicago-Metro area with the various aspects of estate planning, including creating charitable foundations and trusts. For skilled legal advising and representation, contact us now for a free consultation.