When you think about the legacy that you want to leave at the end of your lifetime, it is likely that you have considered leaving a portion of your estate to a certain charity. If you have contemplated this idea but up to now have refrained from taking action, it is important to know that setting up a charitable trust might be simpler than you think. In addition, it may benefit you from a tax perspective.
There are several types of charitable trusts that can be set up, with charitable remainder trusts (CRTs) and charitable lead trusts (CLTs) being some of the most popular. It is always best to understand how the state-specific laws work in the state of Massachusetts before setting up a charitable trust.
What tax benefits can I enjoy when setting up a charitable trust in Massachusetts?
First, it is likely that you will be able to benefit from an income tax deduction when you gift an amount to charity. You can maximize the amount you benefit from this by spreading out the amount you intend to donate over the course of five years.
In addition to this, the sum that you include in your charitable trust will be deducted from the taxable part of your estate at the end of your lifetime. You will also be able to exclude yourself from capital gains tax upon the sale of assets.
If you are considering setting up a charitable trust in Massachusetts, it is a good idea to understand in more detail how it could benefit you. An experienced attorney can help.