For some people in Naperville, the most enjoyable aspect of wealth is having the ability to give it away. If you consider yourself philanthropic, giving is not just something you do, it is part of who you are. You see ways to make the world better for others and you act to make things happen. At the same time, you also take care of the people who mean most to you.
A charitable lead trust in Naperville could provide a means to allow your donation support to continue after your death and, at the same time, provide for the needs of family members or others special to you. However, these trusts need to be structured properly to be effective, so it is advisable to seek assistance from a Naperville trust lawyer who could establish the trust to accomplish your specific goals.
A charitable lead trust in Naperville provides income to one or more designated charities for a set period to time. After that time expires, the remaining assets in the trust are disbursed to beneficiaries such as family members or friends. In some cases, a charitable lead trust may be set up to pass the remaining assets back to the person who established the trust.
The period during which payments are made to charity could be a specific number of years or may be tied to the lifetime of a person or people. Individuals who create charitable lead trusts, who often called grantors or settlors, may fund the trust and start providing payments to the charity during their lifetime or may set up the trust to start functioning at their death from the proceeds of their estate. Payments may be a set amount or a percentage of assets or trust income.
One reason for the popularity of charitable lead trusts in Naperville—and the reason they tend to be so complicated—is that a charitable lead trust could offer several different tax benefits. The trust must be established and operated in compliance with IRS rules in order for those benefits to apply, however.
If the grantor retains the ownership of the assets in the trust, the grantor may be eligible to take a charitable tax deduction for payments made to the charitable beneficiary. However, the investment income of the trust may be taxable to the grantor.
If the trust is considered the owner of the trust assets, the grantor does not receive the tax deduction for the payments made to the charity. However, the contributions may reduce estate tax liability. In addition, it is possible to structure transactions to reduce gift tax liability as well.
There are many trust options available to meet a variety of estate planning goals. Some individuals opt to use a donor-advised fund in conjunction with a charitable lead trust to maintain flexibility in the charitable giving arrangements.
As with other trusts, a charitable lead trust in Naperville would need a trustee who could be counted on to administer trust assets appropriately. Those assets may include securities and real estate as well as cash. An estate planning lawyer could determine whether other types of assets may be used to fund a charitable lead trust and provide information and assistance with establishing a trust to serve your needs.