5 Ways Your Estate Plan Can Benefit from a Charitable Remainder Trust

February 7, 2022
Alec Borenstein

When it comes to estate planning, your top priority is to set aside and manage your assets so that all of your beneficiaries can receive a proper inheritance after you pass away. However, another important component of an estate plan maybe to donate money to a charity after you pass away. One of the best tools that you can use in managing this task is a charitable remainder trust.


Creating a charitable remainder trust offers many incredible benefits and helps bolster your estate plan. Our trust attorneys in New Jersey want to explain why it makes sense to start your very own charitable trust:


Benefit #1 -- Reducing Your Taxes

Once the total value of your assets exceeds a certain monetary threshold, you have to pay an estate tax. However, establishing a charitable remainder trust will significantly minimize your tax liability. Placing assets in an irrevocable trust will essentially remove your ownership rights, effectively reducing the size of your estate.


Related post: 5 Estate Planning Documents You Need to Have

Benefit #2 -- Preserving Appreciated Assets

Assets, such as real estate and private equity, are worth a lot of money and may substantially increase in value overtime. As your estate continues to grow in size and scope, you will want to take steps to preserve your assets. A charitable remainder trust not only allows you to avoid capital gains tax but also makes it possible to keep or donate more of your own money.


Benefit #3 -- Flexibility

Charitable trusts are incredibly flexible in determining your beneficiaries, establishing lifetime incomes, and enhancing your retirement plans. You have several asset management strategies that you can employ to bolster and protect your estate. However, keep in mind that any remaining assets will automatically convert into charitable donations.

Related post: 4 Reasons Why You Should Never Create Your Estate Plan Using LegalZoom

Benefits #4 -- Taking Control of Your Assets

You can establish an irrevocable trust that suits all of your needs in terms of how you want to maintain control of your assets. In many cases, gifting assets to charitable organizations is not as cut and dried as it may seem. You can appoint several trustees to carry out your wishes and make donations to the charities of your choice. Having a last will& testament is not the most reliable method of redistributing assets for charity purposes.


Benefit #5 -- Protection From Creditors

Once you pass away, creditors and debt collectors will begin soliciting reimbursement from your estate. However, charitable trusts can protect your assets from any underhanded or unlawful seizures. In the eyes of the law, any assets placed in an irrevocable trust are no longer your property. Therefore, creditors cannot seize anything that you already designated for charity.


Related post: Key Differences in Trusts You Need to Know


Why You Need an Estate and Trust Attorney by Your Side

Proper trust and estate planning in New Jersey is essential to maintaining, controlling, and preserving your assets, especially if you want to set up a charitable remainder trust. It all requires considerable fore thought as well as knowledge of the laws that govern the estate planning process. If you want to yield any of the benefits described in this article, we strongly advise you immediately call an estate planning expert.


Here at Borenstein, McConnell and Calpin, we have a team of estate planning attorneys in New Jersey who can help you plan and prepare for the future. Our ultimate goal is to ensure that you can preserve your legacy and provide future financial protections for your heirs. Schedule an appointment with us today, and we can immediately begin devising an estate on your behalf.

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About us

Borenstein, McConnell & Calpin, P.C. is a Wills & Estate Planning law firm serving Central and Northern New Jersey, as well as New York City. We strive not only to give you a great client experience, but to become your trusted adviser for life. To reach Alec, please send an email to alec@bmcestateplanning.com.

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