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Charitable Trusts

Charitable Trusts Attorneys in Arizona

Providing Clients With Guidance for Their Philanthropic Needs

One of the most underutilized aspects of estate planning involves creating charitable trusts for beneficiaries or public charities.

The benefits of creating a charitable trust can have a considerable impact on society and nonprofit organizations that stand in need of donations.

Charitable trusts also offer significant benefits to their creators and beneficiaries. However, creating a trust requires considerable legal skill, and anyone considering creating one must hire an experienced attorney to assist them.

AVID Esq. Group, LLC of Maricopa County, is a law firm with extensive experience helping individuals create charitable trusts specifically for their needs.

If you want more information about how our law office can assist you with creating a charitable trust, contact our law office and ask to schedule a free initial consultation to learn more about our legal services.

What is a Charitable Trust?

In many instances, individuals who have achieved a high level of financial success or come from wealthy families wish to contribute to philanthropic causes to show their support for their communities.

Individuals who choose to create a charitable trust enjoy many tax benefits and maintain a level of privacy that does not exist when contributing to family foundations.

One way to accomplish this is through the creation of a charitable trust. Arizona law stipulates that donors may establish charitable trusts as part of their estate plan to meet charitable giving, tax planning objectives, and financial goals.

A charitable trust is structured so that it allows individuals to place assets into the trust, which is managed by a trustee.

The methods used to manage the charitable trust depend on its designation. The most common trusts are charitable lead trusts (CLTs) and charitable remainder trusts (CRTs).

However, sometimes, wealthy individuals make donations through family foundations. However, family foundations are considered separate legal entities, and donations cannot be deducted for income tax purposes.

What are the Different Types of Charitable Trusts?

Although there are many different charitable trusts, two are preferred over others. These charitable trusts include:

Charitable Remainder Trusts

Charitable remainder trusts (CRTs) provide income to a beneficiary or group of beneficiaries for a fixed period of time. Often, an individual who creates the trust names their children as beneficiaries for a specified term, which may not exceed 20 years.

After the period has expired, the trust’s remaining assets are donated to the charities previously designated by the grantor.

One advantage of a charitable remainder trust is that the grantor is afforded significant tax benefits when they create a CRT. Grantors are not only given a partial income tax deduction on the value of assets that will be donated to charity, but they will also receive an annual income based on the CRT value.

Charitable Lead Trusts

Conversely, a charitable lead trust (CLT) first provides income to charities for a specified time before any remaining assets pass back to beneficiaries. Allowing charities and nonprofits to benefit from the CLT promotes philanthropy but allows the assets to remain in the family.

A CLT also provides considerable tax savings as the remaining assets that eventually revert back to non-charitable beneficiaries have a lower value than when placed in the trust.

Our Phoenix, AZ, charitable trust attorneys will evaluate your needs to determine which option is rights and the potential long-term benefits.

Are There Any Disadvantages to Creating a Charitable Trust?

Charitable trusts are an excellent way for donors to fund the arts, children in need, and nonprofit organizations and provide support to the education field. Additionally, charitable trusts provide significant tax benefits for grantors and their families.

However, anyone considering creating a charitable trust should be aware of potential drawbacks.

Some of the most common downsides to creating charitable trusts include:

  • Managing charitable trusts can be overly complex for trustees. Therefore, it is always best to speak with a knowledgeable lawyer who can conduct a thorough analysis to determine if creating a charitable trust is in your best interest.
  • Charitable trusts are irrevocable, meaning donors may not access assets placed within the trust. In some instances, donors encounter unforeseen expenses and are unable to utilize trust assets.
  • The rules that govern charitable trusts and their potential tax-exempt status frequently change, which can affect how donors, charities, and beneficiaries ultimately benefit.

If you need further clarification regarding the benefits and drawbacks of creating a charitable trust, contact AVID Esq. Group, LLC of Phoenix, Arizona, to schedule a free case evaluation to determine what estate planning strategies work best for your needs.

What Makes Your Charitable Trust Attorneys the Best Choice to Help Me With My Legal Needs?

Creating a charitable trust is an honorable way to put your financial resources to work for charities and other organizations in need.

However, to ensure that you, the charities, and your beneficiaries receive the maximum benefits, it is best to hire an attorney with comprehensive experience creating trusts.

Our Phoenix, Arizona law firm has a proven record of assisting individuals in creating charitable trusts designed to benefit community needs and non-charitable beneficiaries.

Our skilled charitable trust attorneys can help you make decisions that will fulfill your goal of helping organizations in need that also provide tax benefits.

AVID Esq. Group, LLC diligently creates comprehensive plans based on your needs and how you wish to assist worthy charities.

As a result, our skilled legal team continually strives to develop long-lasting relationships with clients.

For this reason, our law firm uses the latest technology to communicate with clients and ensure they stay informed.

If you want to learn more about the benefits of charitable trusts and possible tax-exempt status, you must speak with one of our highly trained AZ lawyers. Contact AVID Esq. Group, LLC, today at our Phoenix office at 480-467-5636 to schedule a free no-obligation consultation.