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What is a charitable trust?

As you construct your Pennsylvania estate plan, you may wish to consider adding one or more charitable trusts. These are great ways to provide for your favorite church, charity, school, library, animal shelter or any other nonprofit organization while providing for yourself at the same time.

As explained by Fidelity.com, a charitable trust lets you fulfill your philanthropic goals and give yourself some benefits in addition. How? You name two beneficiaries in a charitable trust, your designated charity and a noncharitable beneficiary that can be yourself.

Benefits to you

When you establish a charitable trust, you get to do the following:

  • Choose the kind of trust you want, a lead trust or a remainder trust
  • Choose how long you want the trust to last
  • Choose the assets you wish to place in the trust
  • Choose when and how you want those assets distributed
  • Retain control of those assets if you name yourself as trustee for the trust
  • Possibly receive substantial tax benefits

Two types of charitable trusts

Which type of charitable trust you choose to establish determines who gets the trust income and the trust assets and when they get them. For instance, in a charitable lead trust, your designated charitable beneficiary receives the trust income each year. You, as the designated noncharitable beneficiary, get the assets back at the end of your trust’s life.

A charitable remainder trust works exactly opposite. Here you, as the designated noncharitable beneficiary, receive the trust income each year. When your trust ends, your designated charitable beneficiary gets the trust assets themselves.

This is general educational information and not intended to provide legal advice.

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Law Office of Margaret S. Phiambolis
1012 Bethlehem Pike
Suite 103
PO Box 356
Spring House, PA 19477

Phone: 215-664-7764
Phone: 215-628-8227
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