Charitable donating enables people in Lombard to make a difference in the world by supporting causes that have a meaningful impact. If you regularly donate to charitable organizations, you might wonder about the best way to continue supporting those causes after you are no longer in a position to make your customary contributions.

While it is possible to make a bequest to a charity in a will, sometimes other options make more sense. A charitable lead trust in Lombard enables you to support your favorite causes and provide for loved ones after your passing. A knowledgeable estates and trusts lawyer could explain the benefits in your particular situation.

How a Charitable Lead Trust Operates

Many people in Lombard are familiar with a charitable remainder trust. This type of trust provides income to the grantors during their lifetime and then transfers the remainder to a charitable organization after their death.

In many ways, a charitable lead trust functions in the opposite manner. The designated charitable causes would receive money from the trust for a certain period of time, and after that period expires, the remainder would pass to a non-charitable beneficiary such as a designated family member. A charitable lead trust in Lombard allows the grantor to continue supporting an important cause while helping to meet future needs of family members or other loved ones.

Establishing a Charitable Lead Trust

A charitable lead trust operates similarly to other trusts in many respects. The grantor would need to fund the trust with assets to enable the trust to function and will need to name a trustee to administer the trust.

In addition, the grantor establishing the trust would name both charitable and non-charitable beneficiaries. More than one beneficiary may be named in each category. A dedicated estates and trusts lawyer could assist with the process of establishing a charitable lead trust in Lombard.

Factors to consider include the amount of assets dedicated to the trust, the identity of the trustee who manages those assets, and the amounts to be disbursed before the remainder is distributed to non-charitable beneficiaries. Amounts may be paid to charitable beneficiaries either as a specified percentage of the trust assets or as a set amount. The former is referred to as a unitrust payment while the latter is an annuity payment.

Tax Considerations

If properly structured, a charitable lead trust in Lombard could provide numerous tax benefits. The value of the part of the trust going to charity should provide an estate or gift tax deduction.

Furthermore, when a charitable lead trust is set up as a grantor trust and meets Internal Revenue Code requirements, the grantor may be able to take an income tax deduction. However, the value of the deduction may be reduced by certain factors. A trusts and estates lawyer could analyze the circumstances involved to determine the likely projected tax implications.

More Information About Charitable Lead Trusts in Lombard

A charitable lead trust may be the ideal vehicle to meet your goals, but before taking action, it is wise to consider all the potential courses of action. A consultation with an experienced trusts and estates attorney could help answer your questions and provide an idea of how a charitable lead trust might fit with your estate plan.

The advantages of a charitable lead trust in Lombard are many. However, other types of trusts or different options may be a better fit. For more information about how a charitable lead trust could benefit your situation, consult an experienced estate attorney.