If you want to set up a trust, it is vital to go over all of the different options you have. The choices you make will impact your loved ones and may affect others as well, especially if you want to contribute to a charity, for example. If you have decided to contribute to a charity through your estate plan, it is crucial to understand how different types of trusts differ.
While many people contribute to charities through charitable remainder trusts, you could also set up a charitable lead trust in order to make a contribution. However, it is important to understand how these trusts work.
An overview of charitable lead trusts
According to The New York State Office of Parks, Recreation and Historic Preservation, people can use a charitable lead trust to send interest payments to a charity for a specific period of time. Once the term ends or the person who created the trust dies, the trust’s net assets go to their family members or designees.
Creating a charitable lead trust
Before you move forward with a charitable lead trust, make sure it is the most effective estate planning strategy. For example, you might want to look into charitable remainder trusts as well. If you have any areas of uncertainty with respect to your options or the process of setting up a charitable lead trust, make sure you address these issues promptly.
If you create a charitable lead trust, you could enjoy peace of mind and a sense of accomplishment, especially since you can contribute to a cause that you support.