Giving to charity through an estate plan allows a person to leave a lasting impact beyond their own lifetime. Charitable trusts are one of the most powerful and effective estate planning tools for those who want to give back to those in need. A charitable trust is an irrevocable trust that provides tax benefits for both the donor and the charity receiving the funds. If you are interested in giving money or other assets to charity, work with an estate planning lawyer who can provide the guidance you need.
Basics of Charitable Trusts in Illinois
When you create a charitable trust, it must be in writing and must meet the criteria set by Illinois law. It must also meet the qualifications of a charitable organization, which means that it must have an independent board to oversee investments, spending, and donations. The trust should specify the types of charities that can receive funds from it, as well as any restrictions for those contributions.
Benefits of Charitable Trusts
Charitable trusts offer tax breaks for the donor. The donor is entitled to deductions on their income tax return for any contributions made through the trust. In addition, since the funds are given directly to charity, there are no capital gains taxes due when the funds are distributed from the trust.
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