Understanding Charitable Trusts

Charitable Trusts in Florida

What if we tell you that you could support your favorite cause, reduce your taxes, and take care of your family, all at the same time? A charitable trust makes that possible. It’s more than just a donation. Rather, it’s a strategy that lets you give with purpose while protecting your and your family’s financial future.

Too often, people put off charitable giving because they fear losing financial security. But what if giving didn’t have to mean sacrificing? With the right plan, you can make a lasting impact while keeping benefits for yourself and your loved ones.

At Lappin Estate Planning, we believe generosity and smart financial planning go hand in hand. We help individuals and families create charitable trusts that maximize both giving and financial benefits.

Discuss your options now by reaching out to our office. Call us at 561.778.8590 or submit a contact us form to schedule a consultation.

What Is a Charitable Trust?

A charitable trust is a legal arrangement that allows you to donate assets to chosen charity while also enjoying tax benefits and, in some cases, receiving income for yourself or your loved ones.

Think of it as a way to give with purpose. Instead of writing a one-time check to a charity, a charitable trust lets you create a lasting impact. Depending on how you set it up, you can support your favorite nonprofit while also securing financial advantages for your family. It’s a win-win.

Many people don’t realize that charitable giving can be part of a smart estate plan. A well-structured charitable trust can reduce your taxes, protect your wealth, and help you leave a meaningful legacy.

Let Us Help

Your legacy is your story, your hard work, and your loved ones’ future. We make estate planning simple, personal, and built around what matters most to you. Our lawyer is here to help you create a clear plan that gives you confidence today and security for tomorrow.

Types of Charitable Trusts: Charitable Remainder Trust (CRT) vs. Charitable Lead Trust (CLT)

Not all charitable trusts work the same way. Some provide income for you before benefiting a charity, while others put the charity first. The right choice depends on your financial goals and how you want to give back. Here are the two main types of charitable trusts:

Charitable Remainder Trust (CRT): A Charitable Remainder Trust lets you donate assets while still receiving income. After you transfer assets (cash, stocks, real estate) into the trust, it pays you (or someone you choose) income for life or a set number of years. When the trust ends, the remaining assets go to your chosen charity. With this type of trust, you can enjoy tax benefits, including avoiding capital gains tax on appreciated assets. CRTs are generally an income tax strategy.
Charitable Lead Trust (CLT): A Charitable Lead Trust works the opposite way. This type of trust makes regular payments to a charity for a set period. When the term ends, the remaining assets go to your heirs or another beneficiary. This option helps reduce estate taxes and allows you to support a charity during your lifetime while preserving wealth for your family. CLTs are generally a gift and estate tax strategy.

Not sure which one is right for you? Lappin Estate Planning can analyze your situation and recommend the best choice that aligns with your goals and needs.

How Charitable Trusts Work

Think setting up a charitable trust is complicated? It’s actually easier than you think. Let’s break it down.

Step 1: You Fund the Trust

First, you transfer assets into the trust. This can include cash, stocks, real estate, or even business interests. Once in the trust, these assets are managed and invested to grow over time.

Step 2: You or the Charity Receive Income

If you choose a Charitable Remainder Trust (CRT), you (or a loved one) receive income from the trust for a set period—either for life or a specific number of years. If you choose a Charitable Lead Trust (CLT), the charity receives income first for a set period. After that, the remaining assets go to your heirs.

Step 3: The Charity or Your Heirs Get the Remainder

At the end of the trust’s term, whatever is left in the trust goes to your chosen charity (in the case of CRTs) or your heirs (in the case of CLTs).

The greatest thing about setting up a charitable trust is that it gives you control. You decide who benefits from the trust (you, your family, or the charity first), how long the trust lasts (for life or a set number of years), and which charity receives the final gift.

Considerations for Establishing a Charitable Trust

Thinking about setting up a charitable trust? Before you dive in, there are a few key questions to ask yourself.

“What’s my goal?” Are you looking to support a charity while receiving income for yourself? Or do you want to prioritize giving first and leave assets to your family later? Your goal will determine which type of trust is the best fit.
“What assets will I use?” Not all assets are ideal for a charitable trust. Cash, stocks, and real estate are common choices, but some assets might require extra planning.
“How long should the trust last?” Do you want the trust to provide income for a lifetime, or should it run for a set number of years? This decision affects how much the charity receives and when your heirs will benefit.
“Who will manage the trust?” A charitable trust requires a trustee to handle investments, distributions, and legal compliance. You can choose a professional trustee, a trusted individual, or even a financial institution.
“Do I want flexibility?” Some charitable trusts are irrevocable, meaning you can’t change them once they are set up. Others offer more flexibility. This requires careful planning before any arrangements are made.

At Lappin Estate Planning, we will guide you through the process of establishing a trust to ensure it meets both your financial needs and charitable goals.

Consult with a Florida Charitable Trust Attorney at Lappin Estate Planning

Right now, you have a vision. It may be a desire to give back, leave a legacy, and make a lasting impact. But when it comes to the legal side of things, the process can feel too daunting.

At Lappin Estate Planning, we make setting up trusts simple, stress-free, and tailored to your needs. Whether you want to support a cause, reduce taxes, or provide for your family, we will help you design a trust that aligns with your goals.

After working with us, you will walk away with a legally sound trust that protects your interests while making a real impact. Schedule a consultation with our estate planning attorney today by calling 561.778.8590 or contacting us online via our website.

Frequently Asked Questions About Charitable Trusts

Charitable trusts are irrevocable, meaning they can’t be changed or canceled. They also require ongoing management and legal compliance, which can involve trustee fees and administrative costs.

A charitable trust lets you support a cause while receiving financial benefits, such as tax deductions, capital gains tax avoidance, and estate tax reduction. You may also receive income from the trust before assets go to charity.

Some can be modified or terminated with court approval or by agreement with the charity. Planning ahead is key to ensuring flexibility.

You need to:

Choose the type of trust (CRT or CLT) which should be done in consultation with your attorney and advisors
Select assets to fund the trust
Name a charitable beneficiary and a trustee
Draft legal documents and file them properly

An estate planning attorney can help with each step and ensure everything is structured correctly.

Yes, charitable trusts often avoid capital gains tax, provide charitable income tax deductions, and reduce estate taxes. However, tax treatment depends on the trust’s structure and the tax laws.

A direct donation is a one-time gift, while a charitable trust distributes funds over time. A trust can also provide income and tax benefits before the charity receives the assets.

You must have a clear charitable purpose, a legally drafted trust agreement, a chosen trustee to manage the assets, and compliance with state and federal laws.

Yes and you should discuss with your attorney.

The trustee must manage trust assets and investments, distribute income as directed, ensure legal and tax compliance, and maintain records and reports.

Common ones include choosing the wrong trust type for your goals, not selecting a qualified trustee, overlooking the importance of tax planning, and using vague or incomplete trust terms.

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Your future needs a plan—one that makes the most sense for your unique situation. At Lappin Estate Planning, we’re here to guide you through every step, from wills and trusts to asset protection and probate matters. Let’s build a strategy that fits your needs. Contact us today to start planning.