Trusts

A trust instrument appoints one party, the trustee, to manage property or funds for the benefit of another party, the beneficiary. A common type of trust, called a testamentary trust, is one that is included in a will and becomes effective upon a person's death for the purpose of managing the inheritance for that person's children and providing for their needs until they reach a certain age. Or, you may choose to directly fund a trust during your life and then have the assets of your estate distributed to the trust at your death – this would be a pour-over trust.

Charles A. Randall, P.C. can help you structure a trust that will fulfill your goals while addressing potential tax liability issues. For example, if the party who creates a trust retains too much control over the assets, that party will probably incur the tax liability for any income produced by the trust. Further, the extent that payments to beneficiaries are made from trust income or trust principal has a direct correlation to the tax burden that beneficiaries will incur.

To avoid or reduce tax liabilities, a trust can be created solely for a charitable purpose or partially for a charitable purpose. A charitable remainder trust allows you to make payments to someone during that person's lifetime and then have the remaining assets of the trust go to a charity. By contrast, a charitable lead trust allows you to make payments to a charity for a fixed number of years and then have the remaining assets of the trust go to a noncharitable beneficiary.

Even if a trust is not created for a charitable purpose, a trust can make charitable contributions to reduce exposure to income taxes that the trust itself or beneficiaries would otherwise face.