Being able to give back to your community may be one of your estate planning goals and it is a commendable one. If you are looking for a legal instrument to help with charitable giving even when you are gone, a trust could provide that avenue for you. In California, charitable trusts and other types of charitable entities are governed under CA Code Sections 12580-12599.8. There are two basic types of charitable trusts.
The first basic type of charitable trust is a “charitable remainder trust.” The general idea with this type of trust is you can transfer various types of assets into the trust. The tax-exempt charity can then manage these assets. You or a beneficiary of the trust then receives a portion of income of these funds from the trust for so many years. Once you pass, all donated assets (whether property, cash, etc.) stays with the charity.
The second basic type of charitable trust is a “charitable lead trust.” This trust starts out the same way where you contribute assets to the trust. The charity then receives payments from this trust for a specific number of years. Once you pass, the remaining assets will go to designated beneficiaries.
Keep in mind, both types of charitable trusts can either end after so many years as specified or upon your death. An experienced attorney can help you decide what type of charitable trust works best for your specific charity and your personal goals. All charitable trusts are irrevocable, so it is very important that your lawyer help you with this important estate planning matter.