| Why Use A Charitable Trust? |
Question: Why would anyone use a charitable trust? Answer: For several reasons, only one of which is to benefit a charitable organization. First, a charitable trust, which is irrevocable, reduces the size of a taxable estate. Since federal estate tax can be as much as 55%, that is no small feat. Second, a charitable trust gives the grantor an immediate tax deduction, often of substantial proportions. Third, this kind of trust can still provide income for the grantor for life. Fourth, it can benefit the charity or church in a wonderful way. That brings satisfaction on a personal level, but notice how powerful the other motivations would be for anyone. Question: What about my children? Won't they be left without any inheritance? Answer: No. You can purchase a life insurance policy which may be owned and paid for by the trust with your children as beneficiaries. For example, you can set up a charitable trust and fund it with designated assets, and you can purchase a $1 million life insurance policy naming your children as beneficiaries. The cost of a term life insurance policy for $500,000 is very reasonable for the average person without some serious health problems, and to increase that insurance does not increase the premiums by very much, at least compared to the extraordinary estate planning that is being accomplished. For more information, review the specific trusts in this section. |
| Copyright 2005-2006 by FreeRealEstateLaw.com and Charles E. Marunde |
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| Estate Planning & Asset Protection |
| Learn on this site how to do good estate planning and good asset protection. Learn also how to coordinate your business planning with your estate planning. |
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