Charitable Trusts Lawyers in Colorado
A charitable trust can be a great way for you to create a legacy, by giving back to your community, potentially while you’re still alive, and long after you’re gone.
What Is a Charitable Trust?
A charitable trust, by definition, has to have a specific purpose that’s considered charitable or beneficial to the community. The trust is a set of assets that you give to a charitable foundation for its use, typically for a defined period of time.
There are two types of charitable trusts – remainder trusts and lead trusts.
With a remainder trust, you turn over assets the trust for a designated period of time. You or your loved ones can be the income beneficiaries during life. Once the period of time ends, the charity owns the assets.
With a lead trust, you retain control of the assets, and any interest or returns that come from the assets in the trust go to the charity or is shared by the charity and other beneficiaries that you name. When the trust ends, all of the assets go to your designated beneficiaries.
Advantages of Charitable Trusts
The primary advantages of charitable trusts are the tax breaks. Charitable trusts can help you avoid paying capital gains taxes on appreciated assets (such as stocks). Instead, once you set up a charitable trust, you can get a federal income tax deduction, which is calculated based on the value of the assets in the trust. A charitable trust can also help you avoid paying estate taxes.
You Can Split Your Assets Between a Charitable Trust & a Non-Charitable Beneficiary
If you’re considering a charitable trust, you don’t have to give everything to charity. You can designate that part of your assets benefit one or more charities, and part of them benefit one or more non-charitable beneficiaries. You can even decide at the end of the trust term who will receive the remainder of the assets – the charities or the non-charitable beneficiaries.
How to Set Up a Charitable Trust in Colorado
Decisions about setting up a charitable trust in Colorado should only be made in consultation with an experienced trust attorney and a tax advisor. As part of the bigger picture of estate planning, we can advise you on charitable trusts and help you properly set up a trust that will ensure that your philanthropy endures for years to come.
For more information about charitable trusts, or to schedule your legal consultation, please call (720) 513-2299.
Please note: In addition to charitable trusts, we can also set up family trusts, special needs trusts, gun trusts, pet trusts, and living trusts. Our estate planning law firm is located in Northglenn (near I-25 and 120th Avenue). We help clients throughout Colorado, including Thornton, Arvada, Broomfield, Brighton, and Westminster.