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Creating a charitable trust

On Behalf of | Sep 7, 2023 | Estate Planning

When people contribute to a charity during their lifetime, they may want to continue that support in an estate plan. A charitable trust is established to provide financial assistance to an organization or cause. This could include supporting the arts, education and science, helping the needy or assisting the community.

Key elements

There are several items that are important to include in a charitable trust. The trust must be funded with assets, which can include property and cash, for example. It must list the charity or organization as the trust beneficiary.

It should also list the duration, meaning how long the trust will be in place and whether it is revocable or irrevocable. If it is revocable, the person creating the trust can change it during their lifetime. If it is irrevocable, it cannot be changed unless the court approves.

It must be managed by a trustee who is the person responsible for managing the trust’s assets and using them for the trust beneficiaries. The trustee must act in the best interest of the trust.

Choosing a trustee

When considering who should administer the trust, there are certain characteristics to look for. The trustee should have integrity, act honestly and be willing to put the interests of the trust first.

It’s helpful if they are organized to keep track of financial statements, documents and communication with beneficiaries. They should also be able to treat all beneficiaries fairly and have conflict resolution skills to address disagreements.

If they have financial, business, or tax knowledge that can be helpful as well, but it is not required. If a person needs help to create a charitable trust or has other estate planning needs, there is assistance available.