Education Center

Charitable Trust Portfolio


As the name implies, a charitable trust is a trust set up for the benefit of a specific charitable purpose. Such trusts are usually afforded favorable tax benefits. Unless you have significant assets (our standard is a minimum of $250,000) to donate to the charity, setting up a charitable trust is probably not for you. If you have sufficient assets and charitable intent then establishing a charitable trust can offer significant benefits to all the parties involved.

There are numerous types of charitable trusts. Charitable Lead Trust (CLT)
Charitable Remainder Annuity Trust (CRAT) Charitable Remainder Unit Trust (CRUT) Private Foundation
Donor Advised Fund (DRA)

Each trust serves a unique purpose:

● Charitable lead trusts provide current income tax benefits to the donor.
● Charitable remainder trusts are often used when a donor has highly appreciated
property or assets.
● Private Foundations give donors complete control over granting and investment
decisions. It can be funded with, and continue to hold, most any kind of asset, including
private equity, tangible assets, real estate, and intangible personal property.
● Donor Advised Funds are set up and managed by the charity. Once funds are deposited
into the fund, he donor is able to make recommendations to the sponsoring organization as to how those funds are invested and granted out, but actually cedes all legal control.

Each type of charitable trust provides different income and estate tax advantages. Often the charity will provide the necessary legal services to establish the trust as well as counsel the donor on the best type of trust to be established given the donor’s objectives and assets.