Charitable Trust Planning for Santa Fe Springs Residents

Start with the purpose and the people involved

Write down what you hope the arrangement will accomplish. Be specific about the charitable purpose, who you want to receive payments, and what you expect to remain for charity. Those goals are connected: a charitable remainder trust provides payments to noncharitable beneficiaries before a charitable remainder.

Because the trust is irrevocable, the decision is not simply whether a charitable gift sounds appealing. Consider whether you are comfortable committing the assets to the arrangement and with its intended recipients and charitable destination. Use a consultation to discuss whether those features fit your priorities.

• List the people you are considering as payment recipients and the charity or charitable purpose you have in mind.
• Describe the outcome you want for both the beneficiaries and the eventual charitable remainder.
• Note questions about how the plan would work if your priorities or circumstances change.

Gather an asset picture before the consultation

Prepare an inventory of the assets you are considering, with enough detail to identify each one and its current ownership. Include available account or property records and note any uncertainty about ownership, restrictions or valuation. This is practical preparation for a focused conversation, not a list of legal eligibility requirements.

For each asset, record where it is held, whose name appears on the record, and whether another person or organization has an interest in it. If you do not know an answer, flag the question rather than guessing. The asset picture helps frame a discussion of what you might place into a trust and what records would be relevant to ongoing administration.

• Collect recent statements or ownership records for assets you may want to discuss.
• Make a separate list of assets you do not want to include, and why.
• Bring any existing estate-planning documents that describe your current intentions.

Understand the continuing responsibilities

A charitable remainder trust involves more than choosing recipients and a charitable remainder. Tax reporting and compliance obligations continue, and income payments can have tax consequences. Plan to discuss how those ongoing responsibilities would be handled and what records would need to be maintained.

Do not assume that creating a charitable trust automatically produces a tax deduction or makes income tax-free. The tax treatment of a particular arrangement depends on facts that should be evaluated with appropriate professional advice. Before proceeding, ask what reporting and recordkeeping would apply to the proposed structure and who would be responsible for those tasks.

• Ask what tax reporting and compliance work the proposed trust would require.
• Discuss how payment records and asset records would be maintained over time.
• Identify tax questions to take to a qualified tax professional.

Prepare for a useful remote conversation

Codi M. Dada Law Office P.C. is based at 802 Grant Ave, Novato, California, and offers virtual services throughout California. For a remote consultation, organize the information you have about your charitable objective, proposed payment recipients, possible assets and current documents. A short list of unresolved questions can make the conversation more productive.

A practical next step is to compare the trust’s irrevocable nature and continuing obligations with your goals before deciding whether to pursue one. Ask how the proposed arrangement would address the people you want to benefit, the charitable remainder, the assets involved and ongoing administration. You can then identify what additional information or professional input is needed to evaluate the plan.