Every estate plan is different, and you would be wise to craft a plan that provides you with the best chance for future security. In most cases, people begin the estate planning process by creating a will — a document that allows them to decide what will happen to their property after their passing. While a will is sufficient, there are times when additional estate planning tools can be beneficial — such as a trust.
A trust is a tool that provides you with the opportunity to set aside and protect assets for a specific use. There are different types of trusts that accomplish specific goals you may have for your estate, such as charitable giving. If this is a priority for you, you may consider the benefits of a charitable remainder trust — an option that offers assurance for what will happen to your property during your lifetime and after your pass.
What does a charitable remainder trust do?
A charitable remainder trust is an irrevocable trust, which means you will not be eligible to modify the terms of the trust or amend it after its creation. This type of trust offers you some benefits, as it will reduce taxable income while simultaneously accomplishing specific goals. Assets in a charitable remainder trust will first go to beneficiaries for a specific period of time, and after that time is complete, the remainder will go to a charitable organization of your choosing. This is an attractive option for many, as it allows you to address dual interests with one step.
One of the drawbacks of a charitable remainder trust is its irrevocable status. You must be certain of this decision and the assets you will place in the trust before you proceed. This type of trust may be a beneficial part of your estate planning strategy that includes philanthropic objectives, as well as caring for your loved ones.
The right estate plan for you
There are many benefits to a charitable remainder trust, but that does not make it a beneficial or prudent option for every Texas adult. If you are unsure of whether this is an optimal addition to your plan, it may help to start with an assessment of your estate and your objectives for the future. With careful planning and clear objectives for your estate plan, you can have confidence regarding the security of your future interests.