Charitable Remainder Trusts in Columbia County

Our Elder Care Lawyers Can Assist You in Setting Up a Trust

You’ve worked hard your entire life, and you want to make sure the money you leave behind will have the maximum impact possible. This is true whether you bequeath your wealth to your family members, your friends, or to a cause that means a lot to you.

One way to ensure your philanthropic gifts are effective while still giving you a stable income is to create a charitable remainder trust. Not only does it allow you to leave a tax-free gift to charity after you pass, you’re able to earn money from the trust while you’re still alive. A win-win situation!

Planning your estate can be complicated, especially if you have been successful during your lifetime. You have to worry about estate taxes and dividing up your assets to ensure your family and loved ones are protected. The Central Pennsylvania attorneys at Kreisher Marshall & Associates, LLC, have dedicated their careers to helping seniors. Call us today at (570) 784-5211 to learn more about how to set up a charitable remainder trust.

What Is a Charitable Remainder Trust?

A charitable remainder trust takes a financial asset, such as a stock or a piece of real estate, and converts it into lifetime income. Doing so lowers your tax burden by allowing you to avoid both the capital gains tax and estate tax. The remaining value of the asset will be transferred to the charity of your choice after you die.

How Does a Charitable Remainder Trust Work?

A person takes an asset that has appreciated and places it into an irrevocable trust. This is a trust that cannot be changed later on, meaning you no longer count it as part of your estate. The asset can then be sold at full market value with the full amount going into the trust. The trust gets reinvested into a portfolio that will pay you a yearly income for the rest of your life.

In addition to avoiding the capital gains tax, you are also able to take a charitable deduction on your next tax return at the time of the trust’s formation. This is possible because when you pass away, whatever is left in the trust will immediately go to a charity.

There are two main types of charitable remainder trusts. An annuity trust will pay you a fixed sum each year, no matter what fluctuations occur with the trust’s investments. A unitrust will pay a variable amount depending on the trust’s performance. You will increase your dividend if the trust performs well, but in an economic downturn, you might see your income from the trust decline.

Can You Make Any Charity the Beneficiary of a Charitable Remainder Trust?

Pennsylvania law dictates which types of charities are eligible for a charitable remainder trust. Because setting up a trust like this must be done carefully to avoid any mistakes, it is wise to consult with an experienced financial and elder law attorney. Once it has been established, while there are certain revisions that can be made (for instance, if the charity you designate dissolves, it’s possible to change to another eligible charity with no penalty), many terms you agreed to are irrevocable.

At Kreisher Marshall & Associates, LLC, we help people from all backgrounds create tailor-made estate plans to suit their specific needs. We understand the complex process of estate planning in Pennsylvania, and we work hard to empower our clients to make the best choices. To discuss your estate plan with one of our experienced Columbia County estate planning lawyers, call (570) 784-5211.

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