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What is a charitable trust?

There are many forms of trusts that New Jersey residents can create, and one popular form is the charitable trust. A charitable trust has many benefits which will be discussed within the paragraphs of this post, but first readers may appreciate an explanation of what a charitable trust really is. Generally, a charitable trust is a trust set up explicitly for a particular charity and that is managed by the chosen charity during the trust creator's lifetime.

A charitable trust holds property in trust for a chosen charity, and when the trust creator dies, that charity receives the property in full. Not all property may be placed in a charitable trust, and individuals who wish to better understand what property may be included in a charitable trust can consult with a New Jersey trusts attorney. During a trust creator's lifetime, the charitable trust pays him either an annuity from the trust or a percentage payment of the trust's value.

One of the big advantages of creating a charitable trust is that the trust does not have to be probated. When the trust creator dies, the trust she has established for her chosen charity will pass directly to the named entity. Additionally, charitable trusts can help property owners avoid paying capital gains on property without having to sell it during their lifetimes.

There are many ways that a charitable trust can serve the interests of a New Jersey resident. Though not all estate creators may believe that they have sufficient assets to make such a trust worthwhile, they are beneficial testamentary devices for those who wish to leave assets and property to organizations that support their causes. Readers may discuss other trust options with their attorneys when they create or review their estate plans.

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