When thinking about estate planning, most people focus on protecting their family’s future, but it’s also a great opportunity to support causes close to your heart. Charitable trusts are a smart way to do both! They allow you to make a meaningful impact while also offering significant tax benefits. Whether you want to minimize taxes or create a lasting legacy, estate planning with trusts provides valuable solutions.

In this blog, Niswanger Law in West Monroe, LA breaks down how you can use charitable trusts to support charities, reduce tax burdens, and achieve your estate planning goals.

 

What is a Charitable Trust?

A charitable trust is a legal entity that allows you to donate assets to a charity, with benefits for both the charity and you. The two main types of charitable trusts are:

• Charitable Remainder Trusts (CRT): You or your beneficiaries receive income for a specified time, with the remainder going to a charity.
• Charitable Lead Trusts (CLT): The charity receives income first, and the remainder goes to your heirs after a specified period.

These trusts can help you reduce estate taxes, capital gains taxes, and even income taxes, all while making a lasting contribution to the causes you care about.

 

Tax Benefits of Charitable Trusts

Here’s where things get exciting—using charitable trusts comes with significant tax benefits:

• Immediate Tax Deductions: You can qualify for an income tax deduction based on the trust’s value when you set up a charitable trust.
• Capital Gains Tax Reduction: By transferring appreciated assets (such as stocks or real estate) to a charitable trust, you can avoid capital gains taxes when the assets are sold.
• Lower Estate Taxes: Assets placed in a charitable trust are removed from your estate, reducing the estate taxes your heirs might otherwise face.

 

How Charitable Trusts Benefit Both You and Your Family

While charitable trusts are great for supporting causes close to your heart, they can also provide significant benefits for your family. Many people assume that giving to charity through a trust reduces what their family will inherit, but with the right estate planning with trusts, you can benefit both your family and your favorite charities.

For instance, with a charitable remainder trust (CRT), you can generate income for yourself or your beneficiaries while still contributing to charity. Here’s how it works:

• Income Generation: The trust can provide you or your beneficiaries with fixed or variable income for a set period.
• Future Giving: Once the trust’s term ends, any remaining assets go to your designated charity.
• Tax Advantages: You benefit from immediate tax deductions, reduced capital gains, and lower estate taxes.

 

Similarly, a charitable lead trust (CLT) works by providing payments to a charity first for a set period, with the remaining assets then passing to your heirs. This strategy can significantly reduce the amount of taxes your beneficiaries pay on their inheritance, ensuring more of your wealth stays within your family.

 

Estate Planning with Charitable Trusts

Beyond tax perks, estate planning with trusts helps you create a lasting legacy. You can designate a portion of your estate to go to a charity while still providing for your family. Trusts can be tailored to meet your specific goals, ensuring your charitable and financial objectives are balanced.

Choosing the right charitable trust depends on your financial situation and the causes you want to support. Whether you’re interested in a CRT or CLT, Niswanger Law’s charitable planning offers expert guidance to help you make the right decision.

 

Niswanger Law: Your Partner in Strategic Charitable Trusts

Niswanger Law provides expert assistance in creating a charitable trust strategy that aligns with your values and financial goals:

• Specialized Expertise: We focus on charitable planning and estate solutions tailored to your values and financial goals.
• Personalized Guidance: Whether it’s a charitable remainder trust or charitable lead trust, we guide you through every step.
• Maximized Benefits: Our approach ensures your plan benefits both your chosen charities and your estate’s financial health.

 

Ready to Create a Charitable Trust? Start Planning Today!

Establishing a charitable trust is more than just a financial decision—it’s your opportunity to make a lasting impact on causes that matter, while ensuring your family is provided for. With Niswanger Law, you can confidently achieve both your charitable and estate planning goals.

Curious how a charitable trust can benefit your family and the causes you care about? Schedule an appointment online or call us at (318) 953-0071. Niswanger Law is located at 3820 Cypress Street, West Monroe, LA 71291. We’re ready to guide you every step of the way.