Charitable Trusts Attorneys in Arizona

Providing Clients With Guidance for Their Philanthropic Needs

One of the most underutilized aspects of estate planning involves creating charitable trusts for beneficiaries or public charities.

The benefits of creating a charitable trust can have a considerable impact on society and nonprofit organizations that stand in need of donations.

Charitable trusts also offer significant benefits to their creators and beneficiaries. However, creating a trust requires considerable legal skill, and anyone considering creating one must hire an experienced attorney to assist them.

AVID Esq. Group, LLC of Maricopa County, is a law firm with extensive experience helping individuals create charitable trusts specifically for their needs.

If you want more information about how our law office can assist you with creating a charitable trust, contact our law office and ask to schedule a free initial consultation to learn more about our legal services.

What is a Charitable Trust?

At our firm, we help clients achieve their philanthropic goals while also addressing financial considerations like tax savings and asset management. Many individuals who have achieved financial success, or those with family wealth, feel compelled to give back to their communities. By creating a charitable trust, individuals can provide substantial support to causes they care about while also taking advantage of tax benefits and privacy protections not available with family foundations.

Arizona law provides the framework for establishing charitable trusts, allowing donors to include them as part of their estate planning. A charitable trust allows individuals to transfer assets into a structured entity managed by a trustee, ensuring the funds are used in alignment with both the donor’s financial goals and charitable intentions.

Two popular types of charitable trusts are charitable lead trusts (CLTs) and charitable remainder trusts (CRTs). CLTs allow the trust to make annual donations to a designated charity, with any remaining assets going to beneficiaries after a set period. In contrast, CRTs distribute a set amount to non-charitable beneficiaries over time, with the remaining assets eventually going to the charity. Both types of trusts offer donors tax-saving opportunities by reducing gift and estate tax liabilities, providing a strategic way to manage assets while fulfilling charitable wishes.

Although some clients choose to make donations through family foundations, it’s important to note that foundations are separate legal entities, limiting the potential for income tax deductions. With charitable trusts, clients not only manage their assets effectively but also benefit from privacy and flexibility, ensuring their contributions have lasting, impactful effects on the causes they care most about.

What are the Different Types of Charitable Trusts?

Although there are many different charitable trusts, two are preferred over others. These charitable trusts include:

Charitable Remainder Trusts

Charitable remainder trusts (CRTs) offer a strategic way for individuals to provide income to a chosen beneficiary or group of beneficiaries for a set period. Typically, someone establishing a CRT may name their children as beneficiaries, designating a term of up to 20 years. During this period, the trust distributes annual income to the beneficiaries. Once the term expires, the trust’s remaining assets are transferred to the grantor’s chosen charities, creating a lasting legacy of giving.

One of the significant advantages of creating a CRT is the tax benefit. When setting up a CRT, the grantor can receive a partial income tax deduction based on the projected value of the assets that will eventually go to charity. Additionally, the grantor gains annual income from the trust, calculated on its fair market value, adding a stream of income during the trust’s active term.

Charitable Lead Trusts (CLTs)

Alternatively, charitable lead trusts (CLTs) distribute income to charitable organizations first for a defined period. After this, any remaining assets return to the non-charitable beneficiaries, often family members. A CLT lets individuals promote philanthropy by supporting charities while keeping assets within the family.

CLTs also come with valuable tax benefits, as assets transferred to the trust have a reduced value by the time they revert to non-charitable beneficiaries, lowering overall estate and gift tax liabilities.

Our attorneys in Phoenix, AZ, can help guide you through the decision-making process, ensuring you select the trust structure that aligns with your goals. By understanding each option’s potential impact, we help you achieve philanthropic and financial objectives that benefit both loved ones and charitable causes.

Are There Any Disadvantages to Creating a Charitable Trust?

Charitable trusts are an excellent way for donors to fund the arts, children in need, and nonprofit organizations and provide support to the education field. Additionally, charitable trusts provide significant tax benefits for grantors and their families.

However, anyone considering creating a charitable trust should be aware of potential drawbacks.

Some of the most common downsides to creating charitable trusts include:

• Managing charitable trusts can be overly complex for trustees. Therefore, it is always best to speak with a knowledgeable lawyer who can conduct a thorough analysis to determine if creating a charitable trust is in your best interest.
• Charitable trusts are irrevocable, meaning donors may not access assets placed within the trust. In some instances, donors encounter unforeseen expenses and are unable to utilize trust assets.
• The rules that govern charitable trusts and their potential tax-exempt status frequently change, which can affect how donors, charities, and beneficiaries ultimately benefit.

If you need further clarification regarding the benefits and drawbacks of creating a charitable trust, contact AVID Esq. Group, LLC of Phoenix, Arizona, to schedule a free case evaluation to determine what estate planning strategies work best for your needs.

What Makes Your Charitable Trust Attorneys the Best Choice to Help Me With My Legal Needs?

Creating a charitable trust is an honorable way to put your financial resources to work for charities and other organizations in need.

However, to ensure that you, the charities, and your beneficiaries receive the maximum benefits, it is best to hire an attorney with comprehensive experience creating trusts.

Our Phoenix, Arizona law firm has a proven record of assisting individuals in creating charitable trusts designed to benefit community needs and non-charitable beneficiaries.

Our skilled charitable trust attorneys can help you make decisions that will fulfill your goal of helping organizations in need that also provide tax benefits.

AVID Esq. Group, LLC diligently creates comprehensive plans based on your needs and how you wish to assist worthy charities.

As a result, our skilled legal team continually strives to develop long-lasting relationships with clients.

For this reason, our law firm uses the latest technology to communicate with clients and ensure they stay informed.

If you want to learn more about the benefits of charitable trusts and possible tax-exempt status, you must speak with one of our highly trained AZ lawyers.
Contact AVID Esq. Group, LLC, today at our Phoenix office at 480-467-5636 to schedule a free no-obligation consultation.