Altruism is a noble trait, and one way that many people in the Godfrey area — especially those with significant assets — choose to express this trait is through charitable giving. Charitable giving does not have to end when you pass away, however. One option for passing on your assets to a favorite cause after you die is through the creation of a charitable remainder trust.
The basics of a charitable remainder trust
A charitable remainder trust begins with the execution of the trust documents, and the transfer of your funds that you want to include in the charitable donation to the newly-created trust. It is important to make sure that the charity you selected meets Internal Revenue Service (IRS) standards, meaning it is tax exempt.
The trustee of the charitable remainder trust is the charity itself. As trustee it is tasked with making investments, protecting trust assets and otherwise taking over management of the assets in the trust.
If you want, you can set up a charitable remainder trust so that the charity will give you or another named person part of the income derived from the trust funds. These payments can either be fixed annuity payments or percentage payments. Depending on the terms of the trust, payments could continue for your lifetime or they could be set for a specific number of years. Once you die, the assets in the trust go to the charity, and the trust ends.
Charitable remainder trusts are too complicated to handle alone
Many people in Illinois with a significant amount of assets want to leave a legacy behind to a favorite charity. While some choose to give gifts during their lifetime, others will choose to also set up a charitable remainder trust to pass their assets on to the charity after they die. Charitable remainder trusts are complicated estate planning documents. Do-it-yourself trusts can be ambiguous or insufficient, making them unenforceable when the time comes. For this reason, those interested in executing complex trusts often seek the assistance of an experienced law firm like ours to guide them along the way.