Los Angeles Charitable Trust Attorney
Combining Philanthropy With Smart Estate Planning
A charitable trust lets you support causes you care about while potentially reducing your income, gift, or estate tax exposure, and in some structures, providing an income stream for yourself or your family along the way. For Los Angeles clients with appreciated assets, whether real estate, stock, or a business interest, a charitable trust can be an especially effective planning tool.
As a former IRS revenue and collection officer, Mitch Port brings a practical understanding of how these structures are actually scrutinized by tax authorities, which informs how we draft them for clients.
Charitable Remainder Trusts
A charitable remainder trust, or CRT, allows you to transfer an asset into the trust, receive an income stream for a set term of years or for life, and then have the remaining trust assets pass to one or more charities of your choice at the end of the term. This structure is particularly useful for highly appreciated assets, since the trust can sell the asset without immediately triggering the capital gains tax you would owe if you sold it personally, while you still receive an income tax deduction in the year you fund the trust.
Charitable Lead Trusts
A charitable lead trust works in the opposite order. The charity receives an income stream from the trust for a set period, after which the remaining assets pass to your chosen family beneficiaries. This structure can be an effective way to transfer wealth to children or grandchildren at a reduced gift or estate tax cost, since the value of the charity's lead interest reduces the taxable value of what ultimately passes to family.
Choosing the Right Structure and Charity
The right charitable trust structure depends heavily on your goals: whether you want current income, are focused on maximizing what eventually passes to family, or are prioritizing the size of the charitable gift itself. We also help clients evaluate whether a donor advised fund or a private foundation might serve their philanthropic goals better or in addition to a charitable trust, and we coordinate the trust's terms with your overall estate plan so the charitable giving works alongside, rather than against, your other planning objectives.
Frequently Asked Questions
Do I get an immediate tax deduction when I set up a charitable trust?
Generally yes, for a charitable remainder trust you receive a partial income tax deduction in the year you fund it, calculated based on the present value of the charity's remainder interest. The exact benefit depends on factors such as the trust term, the payout rate, and current interest rate assumptions.
Can I change the charity named in my charitable trust later?
It depends on how the trust is drafted. Many charitable trusts allow you to retain the right to change the designated charity, or to name a class of qualifying charities, giving you flexibility as your philanthropic priorities evolve.
Call (310) 526-3433 to explore charitable trust planning with the Law Office of Mitchell A. Port.
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"I highly recommend Mitchell A. Port"Living outside California, I needed an attorney from the Los Angeles area to handle my difficult LA Probate case. I went online and fortunately found a very experienced Probate Attorney in LA named Mitchell A. Port. Mitchell took my Probate case and did an excellent job helping me navigate through the intricacies of the LA Court Probate system. He quickly responded to any questions I had and was extremely knowledgeable about the steps required to complete the entire Los Angeles County Probate process. I highly recommend Mitchell A. Port to handle any of your future needs concerning the LA Court Probate system.- Randall
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