If you are intending to leave assets behind to a charity, you should consider working directly with an experienced estate planning attorney to help make sure your gifting is done in the way you want. For example, charitable contributions to a trust allow you to pass on assets to a charity but also have significant estate and income tax benefits for you. For wealthier individuals, this could mean hundreds or even thousands of dollars in estate and income tax savings. Bear in mind, however, that a charitable trust is not exempt from taxes; it is instead an allowed charitable contribution deduction.
The most common form of charitable trust is the charitable remainder trust. A charitable remainder trust is an estate planning tool available to anyone who has assets with low bases, which include real estate and stocks. When you fund a trust with these appreciated assets, you can then sell these assets without incurring capital gains taxes. This provides an efficient method for transferring any appreciated property while minimizing estate taxes as well. The two primary types of charitable remainder trusts are known as a charitable remainder annuity trust and a charitable remainder unitrust.
Your Massachusetts estate planning attorney may also advise you about charitable lead trusts as well. If you intend to leave behind assets for charity, consulting with an attorney as soon as possible can help you lay the groundwork for an effective and meaningful gift.
