Charitable Trusts

Whether you seek to promote your favorite charity out of a philanthropist spirit or to obtain tax savings in your estate planning—or both—a common method of benefitting charitable endeavors is through the use of Charitable Trusts. For all of your questions involving Charitable Trusts, including their required components, their benefits, and gift and estate tax considerations, we invite you to contact the Estate Planning legal team at Garg & Associates.

Charitable Trusts are often divided into two primary categories: Charitable Remainder Trusts and Charitable Lead trusts. Their names, as you may imagine, essentially dictate how they work. That is, a Charitable Remainder Trust is a trust that provides for distributions to a non-charity beneficiary (or beneficiaries) for life or a specific term, followed by an irrevocable (meaning, unchangeable) remainder interest given to a charity. A Charitable Lead Trust, on the other hand, is an irrevocable trust giving the income interest of the trust to a charity, with a remainder or reversionary interest passing to non-charitable beneficiaries.

As mentioned, very often a primary goal in the creation of these types of estate planning vehicles involves not only generosity, but tax planning. Remember that we are each afforded not only an estate tax marital deduction, but also an estate tax charitable deduction. Both Charitable Remainder Trusts and Charitable Lead trusts require the incorporation of special provisions in order to qualify for the charitable deduction for estate tax purposes, but when properly implemented, wealth may be passed through these vehicles with little or no estate tax liability imposed on the grantor. Therefore, for many clients with taxable estates who are not married, or for whom the marital deduction and other related planning options do not adequately reduce or eliminate the estate tax bill, charitable deduction planning will be a very attractive option. These types of trust may also have highly beneficial income tax planning benefits.

It is important to understand the different mechanisms involved in the use of charitable planning (for example, a Charitable Remainder Trust can involve either a Charitable Remainder Annuity Trust or a Charitable Remainder Unitrust; a Charitable Lead Trust will involve either a Grantor Charitable Lead Trust or a Nongrantor Charitable Lead Trust), and how each will best suit your personal and tax-planning needs. For more information on charitable trusts, the estate tax charitable deduction, or other estate planning topics, we invite you to give the Houston Estate Planning attorneys at Garg & Associates a call today.

We invite you to contact us for a consultation. Call Garg & Associates, PC at 281-362-2865 or complete our contact form.

firm info  |  practice areas  |  articles  |  faqs  |  blog  |  contact us  |  Site Map  |  resources  |   Find us on Google+   |   Log in

Garg & Associates, PC | 21 Waterway Avenue, Suite 300 | The Woodlands, Texas 77380 Please call 281-362-2865 | Fax: 866-743-4506
Serving The Woodlands, Spring, Houston, Conroe, Kingwood, Tomball, Cypress, Huntsville, Cleveland, Stafford, Montgomery County, Harris County, West Oaks, Memorial, Sugar
Land, River Oaks, Alief, Stafford, Missouri City, and Southwest Houston Texas.