Tampa Charitable Remainder Trust Attorney

Trusts are a common tool used in Florida estate planning. Some trusts are simply designed to avoid probate. Other trusts are designed to provide certain tax benefits for the grantor. One example of this is a charitable remainder trust.

A charitable remainder trust allows a person to give certain property to charity while still claiming certain income and tax benefits. Such trusts need to be carefully structured and managed to avoid potential legal complications. An experienced Tampa charitable remainder trusts attorney can guide you through this process. Knudsen Law is a dedicated Florida estate and probate firm that advises clients on a wide range of matters related to trusts, including charitable remainder trusts.

How Do Florida Charitable Remainder Trusts Work?

In any Florida estate planning trust you have a grantor (the person who creates and funds the trust), the trustee (the person who manages the trust’s assets), and the beneficiary (the person who receives the income or principal from the trust). In the case of a charitable remainder trust, the grantor makes an irrevocable gift of certain property to the trustee, while designating both charitable and non-charitable beneficiaries.

The idea is fairly simple: The trustee pays income from the charitable remainder trust’s assets to the non-charitable beneficiary for a specified period of time. Once that period expires, whatever income and principal remain in the trust are transferred to the charitable beneficiary.

Here is a simple illustration: You own a piece of real estate as an investment. You (as the grantor) transfer it to a charitable remainder trust. The trustee (someone other than you) manages the property and pays any income to you (as the non-charitable beneficiary) for the remainder of your life. After you die, the real estate is then transferred to a charitable organization you designated in the original trust documents.

Charitable remainder trusts can be structured as either a unitrust or an annuity trust. A charitable remainder unitrust (CRUT) guarantees the non-charitable beneficiary an annual payment equal to a specified percentage of the trust’s assets. In contrast, a charitable annuity trust (CRAT), specifies a fixed dollar amount as the annual payment.

Regardless of the type of charitable remainder trust you use, since it is considered a charitable gift, you are allowed to claim a tax deduction for the value of the property transferred to the trustee, less the expected income you are likely to receive back. This deduction can be spread out over a period of 5 years.

Let Our Tampa Charitable Remainder Trusts Attorneys Assist You Today

Charitable remainder trusts can have significant benefits. But there can also be drawbacks that need to be carefully considered depending on your current financial situation and estate planning needs. That is why it is always wise to consult with a skilled Tampa charitable remainder trusts attorney before taking any action. The team at Knudsen Law is happy to sit down with you and help you explore charitable remainder trusts and other options for your own estate plan. Contact us today at (727) 398-3600 to schedule a consultation.