Many clients, especially after they have had an especially profitable year, ask our team about how to best structure their charitable giving. Giving money away is a noble goal, and part of our job as estate planning attorneys is to help you figure out how to have the greatest impact while still making sure your financial foundation is solid. One tool we often suggest for our clients’ charitable giving is called the charitable remainder trust. Today’s blog goes into some details about this kind of trust, so that you might be able to discern whether it could be right for you.
A charitable remainder trust is a tool that allows you to both contribute to a worthy cause and be eligible for important tax benefits. Once you deposit money into the charitable remainder trust, you automatically offset or minimize your current tax liabilities. As time goes on, you stay in some control of the money deposited in the trust, and you become eligible to receive a potential income stream from the trust itself. Then, when you pass, the remainder of the trust is given to the charity or charities of your choosing.
Because you get the trust’s tax deduction today, but you still have access to the income from the trust over your lifetime, the charitable remainder trust can truly be the best of both worlds. Importantly, a contribution to a charitable remainder trust constitutes an irrevocable transfer of cash, so it is essential to choose your contribution wisely.
It can be difficult to know if now is the right time to establish this kind of trust. It is important to think through some of the following questions: are you financially sound? Do you stand to benefit by offsetting tax liabilities based on your income or assets? Is there a cause that you care about and want to contribute to? Being thoughtful about establishing a charitable remainder trust ensures you are keeping your broader goals in mind even as you give generously to others.
Overall, we recommend that you speak with a Texas estate planning lawyer if you are thinking that a charitable remainder trust might be right for you. Each person’s circumstances are different, and each person necessarily has a different set of goals and priorities. By speaking with an expert in the estate planning field, you can make sure you don’t miss a step and that everything in your estate plan is drafted with your goals in mind.
Are You Looking for a Houston Estate Planning Lawyer?
At McCulloch & Miller, PLLC, we understand the value of providing expert estate planning services to the Houston area, because we take pride in providing certainty and peace of mind to our clients and their families. We take the time, attention, and care to make sure you are set up well and to make sure your loved ones will be well taken care of in the future. For a consultation with a Texas estate planning attorney, give us a call today at (713) 936-9073. You can also fill out our online form to have a member of our team reach back out to you as soon as possible.