A Charitable Remainder Trust in Manalapan Township allows you to donate assets to charity, often with a significant tax deduction, while still receiving income from those assets during your lifetime. After a set period, the trust distributes the remaining assets to the designated charity. This option works well for individuals who want to support charitable causes without immediately giving up the income those assets generate.

If you would like help exploring your options, contact our dedicated trusts attorneys today.

How a Charitable Remainder Trust Works

To establish a charitable remainder trust, you must transfer assets, such as cash, stocks, or real estate, into an irrevocable trust. Once you place assets in the trust, you cannot remove them.

For the duration specified in the trust’s terms, you or a named beneficiary will receive income generated by the trust. After the trust term ends, it donates any remaining assets, including undistributed income, to the chosen charity.

Types of Charitable Remainder Trusts

Charitable remainder trusts generally fall into two main categories.

Charitable Remainder Annuity Trust

A charitable remainder annuity trust provides a fixed annual payment, regardless of how the trust’s investments perform. Sometimes the trustee must use principal to meet the payout requirement, while other times the trust may grow over time if investment returns are strong.

Charitable Remainder Unitrust

In a charitable remainder unitrust, the beneficiary receives a fixed percentage of the trust’s value each year. The trustee revalues the trust annually to calculate the payment amount. As a result, income may fluctuate based on how the trust assets perform.

The Benefits of a Charitable Remainder Trust

Setting up a charitable remainder trust provides several advantages:

  • Lower income taxes: Donors can claim a charitable deduction based on the value of the assets placed in the trust
  • Avoidance of capital gains taxes: When you transfer highly appreciated assets into the trust, you can avoid capital gains taxes on the sale of those assets
  • Reduced estate taxes: Assets held in the trust do not count toward the value of your estate
  • Ongoing income: You or your beneficiaries continue receiving regular income, even after placing the assets in trust

When exploring options for charitable giving, consider whether a Charitable Remainder Trust in Manalapan Township meets your financial goals and philanthropic priorities.

Contact a Lawyer About Setting Up a Charitable Remainder Trust in Manalapan Township

If you want to create a Charitable Remainder Trust in Manalapan Township, speak with an experienced lawyer who can guide you through the process. At Nesevich Law, we help clients choose the right tools for estate planning, from establishing trusts to making sure your wishes are carried out after your death.

Contact us today to discuss your charitable giving goals and explore how a charitable remainder trust can support both your legacy and your financial future.