Charitable Trust Planning for Menlo Park Residents

Start with the order of giving

Clarify who you want to receive payments during the trust’s term and which charity you want to receive what remains afterward. A charitable remainder trust is irrevocable: after it is established, you cannot treat the arrangement as an ordinary, freely changeable gift. Consider whether that lasting commitment fits your priorities before pursuing this structure.

Write down the purpose you hope the trust will serve. For example, you might want to provide for a family member while directing remaining assets to a charitable organization. That is an illustration of the structure’s general sequence, not a prediction about the result of any particular plan.

Gather useful information before meeting remotely

A focused consultation is easier when you can describe your intentions and the assets you are considering. Organize the information below as preparation—not as a list of legal prerequisites.

• Your priorities for the people who may receive payments, including the relationship you have to each person and the purpose you want the payments to serve.
• The charitable organization or charitable purpose you are considering, and any questions about how the recipient should be identified.
• A general inventory of possible trust assets, including where each asset is held and what records you have available.
• Questions about when payments should begin, how long you hope they will continue, and what you want to happen to the remaining assets.
• Any existing estate-planning documents or account records that may help explain your current arrangements.

Compare the intended benefit with the ongoing work

The decision is not only whether a charitable gift belongs in your plan. It is also whether you are comfortable with an irrevocable arrangement, payments to noncharitable beneficiaries, a charitable remainder, and continuing administration. A charitable remainder trust has tax reporting and compliance obligations, and income payments can have tax consequences. Those responsibilities continue after the initial planning conversation.

Discuss what records would be needed to track the trust’s assets, payments, charitable remainder and reporting obligations. Do not assume that creating a charitable trust automatically produces a deduction or makes income tax-free; the available information does not establish either outcome for an individual plan.

Use the consultation to resolve open questions

Bring your organized notes and identify the decisions you have not made. Ask how the proposed arrangement would address your intended beneficiaries, the charitable remainder, the assets you are considering and ongoing recordkeeping and compliance. Also ask what consequences may depend on the particular assets or payment design. These are questions to discuss, not conclusions about your tax treatment.

Codi M. Dada Law Office P.C. offers virtual services throughout California from its Novato office. A remote conversation can help you assess whether a charitable trust matches your goals and what further information is needed to evaluate the plan.