Charitable Trust Lawyers in Topeka, Kansas

Trusts are set up for many different purposes. It is more common than most people realize for someone to pass on estate assets to a charitable cause via a trust. You don’t have to be rich and famous to want to leave a legacy.

Charitable trusts can help you donate to a cause you hold dear, while also providing attractive tax advantages for you and your heirs.

However, once you create a charitable trust, it is permanent and cannot be amended or cancelled. So, it is not a decision to take lightly.

The estate planning lawyers at Irigonegaray & Revenaugh, LLP in Topeka can advise and assist you with setting up your living trust to accurately reflect your wishes.

Learn More → Learn More About Living Trusts

What are the benefits of a charitable trust in Kansas?

People who set up charitable remainder trusts do so mainly for the following benefits:

• Leaving a legacy by donating: giving to a cause you hold dear sets an example for younger generations in the family about doing something for the “greater good”.
• Tax advantages: after you fund your charitable trust, you can enjoy several tax benefits including tax deductions, estate tax benefits and capital gains tax benefits. More about this below.
• A new source of income: a charitable trust can be set up to provide an income for you or a beneficiary – a fixed amount per year or a percentage of the trust’s value.

Because of the considerable financial benefits associated with setting up charitable trusts, these types of trusts are irrevocable. If they were revocable, it would be easy to set up the trust as a way to avoid certain taxes temporarily with no lasting financial commitment to the cause or benefit to the charity.

Once you set up your charitable trust, the terms cannot be modified and the trust agreement cannot be nullified. You cannot get back what you have given.

What types of charitable trusts are there in Kansas?

Once you set up a charitable trust, you transfer all the assets you want to donate to a tax-exempt charity approved by the Internal Revenue Service.

The two main types of charitable trusts are charitable remainder trusts and charitable lead trusts.:

Charitable Remainder Trust

This is the most popular type of charitable trust. It benefits the beneficiary before the charity.

The trust makes payments to one or more non-charitable beneficiaries (e.g., you, your children, your grandchildren) and the charity serves as the trustee, managing the trust funds and making investments.

The charity pays income to the beneficiary for a certain number of years or for his or her lifetime depending on your instructions. It then receives the remaining assets in the trust and the trust is closed.

Charitable Lead Trust

A charitable lead trust first benefits the charity: you commit to providing a sum of income for a certain number of years (or for your lifetime).

When the period finishes, the remaining assets go to a non-charitable beneficiary, such as children or grandchildren.

When you transfer assets into this type of trust, you receive a charitable deduction for the value of the gift (as determined by the IRS).