Options for Leaving Assets to Charities Upon Death From a Probate Attorney

You have options if you would like to leave assets to one or more charities upon your death. Consider talking to a probate attorney about which option best meets your needs. There are at least four options available to you.

Charitable Remainder Trust

You have the option of setting up a charitable remainder trust. You must fund these trusts through cash, stocks, real estate, private business interests or private company stock while alive. Then, it pays a noncharitable beneficiary on a prearranged schedule ranging from monthly to annually for a period not exceeding 20 years. After that, the charity receives any remaining assets.

You will want to talk to an estate planning attorney because there are at least two types of charitable trusts. Charitable Remainder Annuity Trusts distribute a set amount between 5 and 50% of the remainder of the assets in the trust each year to the noncharitable beneficiaries. Charitable remainder unitrust trusts distribute a fixed percentage of between 5 and 50% of the trust annually. You can establish a charitable remainder trust through your will.

Will

You can name one or more charities as a beneficiary in your will. In that case, you can decide what the charity will receive. For example, you can leave a specified percentage of your estate to the charity, or you can leave them specific items, such as your house. It is best to list the charity’s full name, employer identification number, and street address in your will.

Decide what type of beneficiary you want the charity to be and specify it in your will. You can name them a primary beneficiary, in which case, they get whatever assets you choose to give them. Alternatively, you can make them a secondary beneficiary so that your spouse receives the assets if they are still living. You can also make them a residuary beneficiary, so they get any assets not specified in your will.

Revocable Trust

You can also set up a revocable trust. You can change this type of trust as long as you are of sound mind. In the trust, you name a trustee to take care of the trust’s assets when you can no longer do it. The trust lays out what happens to your assets when you die, so you can leave any assets you want to a charity. You can choose to destroy a revocable trust, add assets to it or name or eliminate beneficiaries as long as you are of sound mind.

You will name a trustee when establishing the trust. It is the trustee’s responsibility to probate your trust and distribute its assets according to your desires, including giving money to charity. You must choose a trustee of high moral standards because they will carry out your wishes.

Irrevocable Trust

You cannot change the terms of an irrevocable trust once you set it up. Furthermore, you lose control of the assets placed in it. In exchange, there are tax benefits when setting up this trust type. In most cases, it also removes the assets from the possibility of someone getting them through a lawsuit. Whoever you name as a beneficiary, including a charity, must give their permission before you can make any changes to the trust.

As with a revocable trust, you must name a trustee who controls what happens with the assets in the trust. In some cases, the person creating the trust can limit how the trustee distributes the trust’s assets after you die.

Charitable Lead Trust

Another option is to create a charitable lead trust. These trusts are basically the opposite of charitable remainder trusts. After your death, the charity gets the assets in the trust for a predetermined time. Then, once that time has passed, any assets remaining in the trust are split between one or more beneficiaries, who are usually family members. Individuals can fund this type of trust while they are alive or create them through their will. The person making the trust can choose if the charity gets a set amount annually or a particular percentage of the trust’s value. This trust can be structured, so they are revocable or irrevocable.

You should discuss this type of trust with probate lawyers in Las Vegas because there are two types, so they can help you decide based on your specific circumstances. With grantee charitable lead trusts, the person making the trust remains in control of the trust’s assets while in non-grantor charitable lead trusts, the charity gets control of the trust’s assets.

Probate Attorney Warns to use Caution Before Naming a Charity a Direct Beneficiary

You can name a charity as the direct beneficiary of an individual retirement account. There are complicated government regulations that apply in that case, which you may want to get a probate lawyer in Las Vegas to explain to you. If you name a charity as the only beneficiary, they may have to wait up to five years to receive the money. Therefore, the individual retirement account payout to a trust is often better. Then, the trust’s trustee gives the money to the charity. If you name a person and a charity, this problem is averted.

You can leave money to charities when you die in many ways. These are only some available options, so start investigating a little deeper before deciding which option works best in your situation. Supporting causes that you are passionate about through estate planning is an excellent way to show how much you care.