One of the greatest things about humanity is how so many people want to help those in need. Many Wisconsin residents feel that giving to charity is personally rewarding.
There are many benefits associated with giving to non-profit organizations through a charitable remainder trust. For example, when created properly, a charitable remainder trust can also provide you or a loved one with a reliable income until your death.
What are the downsides of these trusts?
As you would in all your estate planning endeavors, you need to weigh any potential disadvantages of charitable remainder trusts against their benefits. Five of these include:
- You need to make very large contributions to provide income for yourself and value to the charity.
- These trusts are typically irrevocable, meaning that you cannot change your mind about their provisions once you have finalized it.
- You will no longer have control of the funds once they have been placed into such a trust.
- Any income that you receive from your charitable trust could reduce the total contribution that you end up leaving to your charity.
- You may risk leaving nothing to your charity if you plan to receive high payments from the trust while you’re alive.
Giving to charity is always praiseworthy, and it can help worthy causes and those in need. However, it’s important to make sure that you investigate your charitable giving options thoroughly as you do your estate planning. As you learn more about these options, you will discover how to ensure that your estate plan meets your needs while also protecting your heirs.