At E.A. Goodman Law, LLC, we advise clients about including a charitable trust as part of a comprehensive estate planning strategy. Our experienced charitable trusts attorneys help clients throughout New Jersey from all walks of life — solo boomers, same-sex couples, business owners, high-net-worth individuals — explore their options for charitable gifting.
If you wish to leave a charitable legacy, we will provide you with trustworthy advice, objective insights, and dependable service. We have in-depth knowledge of the applicable trusts, estates, and tax laws and will work to help you achieve your charitable planning objectives. Contact our Morristown office today to set up an appointment.
Is a charitable trust right for me?
Many people associate charitable trusts with the wealthy, but many estate planners can benefit from the inherent rewards in making a charitable gift. Depending on the circumstances, establishing a charitable trust can:
- Provide you (or anyone you designate) with an income for life
- Make gifts to individuals, communities, and worthy causes
- Minimize capital gains taxes
- Provide an estate tax deduction
In short, a well-conceived charitable trust is beneficial for your financial future as well as your personal satisfaction. When you consult with us, we will help you organize your assets and create a charitable legacy that honors you and your loved ones.
Types of Charitable Trusts
Our experienced trusts and estates attorneys have helped clients utilize a number of charitable planning tools, including:
Charitable Lead Trust (CLT)
This is a type of irrevocable trust that holds assets such as real property or securities and provides income to a designated charity for a set period of time. The remaining assets are then distributed to the person making the trust (the grantor) or the designated beneficiaries. There are two types of charitable lead trusts — a “grantor” CLT and a “non-grantor” CLT — that have different tax and estate planning implications, which makes it wise to consult with an experienced charitable trusts lawyer.
Charitable Remainder Trust (CRT)
A charitable remainder trust (CRT) is also irrevocable but differs from a CLT in that the assets are transferred to the trust, which initially provides income to the grantor or a spouse (and an immediate tax deduction). The “remainder” is then distributed to a designated charity after the grantor’s passing.
Other Options for Charitable Gifting in New Jersey
In addition to charitable trusts, E.A. Goodman Law, LLC advises clients about charitable planning options such as:
Charitable Gift Annuity (CGA)
This estate planning tool is somewhat similar to a charitable remainder trust, but the structure is different. A charitable gift annuity is an irrevocable contract between a donor and a charity whereby the donor transfers cash or property to a charity (e.g a university, nonprofit organization, medical center) in return for a lifetime income stream from the charity. The annual income is derived from the charity’s assets and the payments are regulated more strictly than the distributions in a CRT.
Donor-Advised Fund (DAF)
This is a type of charitable investment account that is typically operated by a nonprofit organization (the sponsor). In this arrangement, the donor contributes assets such as cash, securities, real estate, or other property in exchange for an immediate tax deduction. The contributed assets continue to appreciate without tax consequences for the sponsor The donor is permitted to make recommendations about prospective charities, however, the sponsor makes the final decision about which charities will receive the funds.
What Else You Need to Know About a Charitable Trust
Leaving a charitable legacy is a worthwhile goal, but it is crucial to select causes in which you believe. Moreover, any charity you select must be carefully vetted to ensure its legitimacy and that your donation will be used to fund charitable initiatives, rather than to cover the charity’s administrative costs.
At the same time, charitable gifts should not be restricted in a way that makes it difficult for the charity to use. For example, assets such as securities should be directly transferred to the charity rather than sold and donating the profits.
Finally, charitable planning should be based on a realistic assessment of the amount of money you can set aside for charity. By working with an experienced trusts and estates lawyer, you can achieve your gifting objectives, protect your assets and provide for your loved ones.
Contact Our Experienced New Jersey Charitable Trusts Attorneys
If you have questions about charitable giving and estate planning, turn to E.A. Goodman Law, LLC. We will take the time to learn about your life and the causes in which you believe and help you design a generous but sensible charitable plan. Contact our office today to schedule your initial consultation.