Why Should I Consider Gifting Assets During the Estate Planning Process?

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When planning your estate, you’ve likely decided that taking care of your loved one is at the top of your priority list. However, you may also want to give back to charities and organizations. As such, you should consider gifting assets via a charitable trust. The following blog explores this process and its benefits, so you’ll want to keep reading to learn more about this estate planning option. You’ll also discover why working with a Putnam County trusts attorney is a must.

How Does a Charitable Trust Work?

A charitable trust holds assets in order to benefit a charitable organization. This holds assets to be distributed over a period of time to charities and beneficiaries, during and after your lifetime. There are two main types that each serve different purposes – charitable lead and charitable remainder trusts.

A charitable remainder trust provides income to your beneficiaries until you pass. Upon your death, the remainder of the assets will be distributed to charities of your choice. A charitable lead trust functions in reverse order. This allows you to pay out assets to a charity for a specific period of time, and once this time elapses, you the remaining funds will go to the designated beneficiaries.

Regardless of which option you set up, it is crucial to understand that you must outline which charities or organizations you want to donate to and how the assets will be distributed.

What Are the Benefits of Gifting Assets?

Aside from the benefits of being able to provide for your beneficiaries and donate to the charities that you hold close to your heart. You can control where these assets go and how they are distributed, care for your loved ones while you are alive, do not have to liquidate assets, and can spread the transfers out over a period of time.

One of the significant benefits of gifting assets during the estate planning process is that you are able to reap considerable tax benefits. Not only can placing assets in a trust help prevent these assets from depreciating, meaning you will not endure capital gains tax, but you can also sell these assets without incurring any tax liability.

Similarly, if you gift $17,000 or less annually, you will not have to file a gift tax return and this will not impact the lifetime exemption. For married couples, this is $34,000. This helps ensure the charities can reap the full benefits of your donation without dealing with any tax implications.

When you’re ready to set up a charitable trust, it’s necessary to ensure you have the guidance of an experienced attorney. Without someone well-versed in this process, you may find that this can be challenging to set up. At the Law Office of Andres D. Gil, our dedicated legal team will work tirelessly to help you ensure that your trust is established with ease. Contact us today to learn more about how we can assist you.

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