When someone wants to leave money for a charitable cause after their death, careful planning is necessary. Factors ranging from late-in-life medical debts to unhappy family members could reduce what they are ultimately able to gift to the causes they care about.
One of the ways that testators in Nevada who are hoping to leave something for a charitable cause can better protect their legacy involves creating a charitable remainder trust (CRT). Those who create such trusts can help to ensure their comfort as they age while also limiting the possibility of collection activity or family members altering their estate plan after they die.
How does a CRT function?
A CRT is a type of irrevocable trust. As the name implies, the testator who creates and funds the CRT will typically not be able to make any significant changes to the trust after establishing it. That means that they will effectively give up control over the assets used to fund the trust.
However, a CRT will often include instructions for the trustee to use resources to cover someone’s expenses in their golden years and then distribute them to charitable causes in accordance with specific instructions after their death. Although the testator no longer has direct control over the trust assets, they can continue to use and benefit from those resources until they die. What remains after their death can then go toward charitable causes.
A CRT offers someone comfort in their golden years, direct control over their legacy and also a layer of protection from collection activity and other challenges as they age.
Irrevocable trusts require careful planning
Putting together a legally-compliant CRT in Nevada will require an understanding of the applicable state laws and also careful consideration of what the testator will potentially need for support in the future, as the plans they integrate into the trust documents will typically not be modifiable in the future.
With the right funding and terms, a charitable remainder trust can provide someone with security as they age and allow them to leave a meaningful legacy when they die. Exploring how trusts can help someone achieve their estate planning goals with the assistance of an experienced legal professional can benefit those who have specific wishes for the impact they hope to make when they die.