What tools and strategies can help philanthropists align their charitable goals with other wealth planning objectives?
There are many approaches that can help, depending on your situation and your goals. One approach involves split-interest trusts, which, as the name implies, are designed to benefit multiple parties. With a charitable remainder trust (CRT), income from trust assets goes to the person who established it—the grantor—or to a beneficiary the grantor chooses. At the end of the trust's term—oſten the grantor's lifetime—the remaining assets in the trust go to a designated charitable organization. Alternatively, with a charitable lead trust (CLT), the charity gets the first benefit, and your chosen beneficiary receives the assets that remain when the trust term ends. Both options let you provide a financial benefit to a charity while also generating income for yourself or a family member. Yet there are important differences, and the approach you choose will depend on the nature of your assets, your tax situation and your goals.