If you are interested in designing a trust to transfer assets to a charity, you have two options in North Carolina.
A charitable remainder trust has both income tax and estate tax deductions, which appeals to many interested in donating to charity. This option allows the donor to leave some of their estate to a charity while gaining a benefit for themselves in the short term. The donor of the trust will receive income from it for a certain period. Low yield assets often make the most sense for a charitable remainder trust. Within this category there are two further delineations: charitable remainder annuity trusts and charitable remainder unitrusts. While both pay out part of the value to a beneficiary, the annuity trust pays out a fixed dollar amount whereas the unitrusts pays a percentage. A remainder interest is paid out to the charity.
A charitable lead trust pays income to the charity for the lifetime of individuals or a particular number of years. When the trust expires, any assets left are given to either the donor, spouse or children. The clear difference with this trust is in the type of assets that should be transferred to this trust. Charitable lead trusts make the most sense for assets with high levels of growth possibility. Like charitable remainder trusts, there are two additional types into which a lead trust is divided: a charitable lead annuity trust and a charitable lead unitrust. Like above, the annuity trust pays the same dollar amount each year regardless of the earnings and the unitrust pays a fixed percentage.
Leaving part of your assets to charity is a wonderful and special way to give back to others. There are many options for aligning your desires and assets to a charitable trust. Meek Law Firm is always available to meet with you to determine which options work best for your wishes or circumstances.
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