Trusts for Every Need

Americans love to give. Whether it's to family or charity, many Americans make a habit of giving during their lifetime and cherish the thought of leaving a lasting legacy. In fact, U.S. charitable giving is about $250 billion per year, rivaling the gross annual economic output of such industrialized nations as Sweden and Switzerland.¹

If your family has a fondness for giving, or if you plan to pass on the fruits of your life's labor to younger generations, you may want to employ a giving strategy that relies on trusts. Trusts can help increase the benefits to both the giver and the receiver.

Cut Probate Costs
Perhaps the most common benefit of a trust is the avoidance of probate, the public and often-costly process whereby the courts oversee the distribution of your assets after you die. Although a properly written will can help make probate less burdensome, it doesn't avoid probate. By contrast, none of the assets placed in a properly structured trust will be subject to probate. This may help reduce probate costs and ensure that more of your property goes to the people or charities you intend.

Reduce Taxes
Certain trusts can help leverage your gifts to charity while also helping to reduce the possibility of estate taxes.

One popular strategy involves transferring assets to a specific type of trust that pays an income to the donor for life (or the joint lives of the donor and his or her beneficiary). After the donor's death, the assets in the trust belong to the designated charity. The potential tax benefits here are three-fold: (1) Assets placed in the trust may be partially deductible for income tax purposes. (2) Any appreciated assets become exempt from current capital gains taxes. And (3) trust assets are no longer considered part of the donor's estate for estate tax purposes.

Before implementing a strategy involving trusts, you should consult an experienced estate planning professional. Call today to learn how the appropriate giving strategy can help improve the quality of your gifts and possibly your tax situation.

1) Investor's Business Daily, January 3, 2005

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