Read on to learn about the different types of charitable and foundation trusts. There are several options on how to leave a legacy through charitable contributions.
Charitable Remainder Trust
In contrast to charitable lead trusts, a charitable remainder trust provides for an annual interest payment to the donor, then distributes the assets to the charity at the term’s end. The trustee can sell appreciated assets without paying capital gains taxes.
Charitable Lead Trusts
In this case, charities receive the interest from the donor’s gift for a set period – typically 10-20 years. At the end of that period of time, the assets left in the trust go to a non-charitable beneficiary, such as the donor’s children or the donor. Charitable lead trusts can be a good plan for people with substantial assets whose value will appreciate over time. Any increase in value escapes taxation in the donor’s estate.