Can a Charitable Remainder Trust Be Set Up by a Will?
A charitable remainder trust is an irrevocable trust. It cannot be changed or destroyed once created. The settlor of the trust sets it up for the benefit of the charity of his choosing and for trust beneficiaries, who usually are family members. A person can create a charitable remainder trust during his life, and he can also provide for a charitable remainder trust to be set up after his death via his will.
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Trust Definitions
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A settlor, a trustee, a beneficiary and a res are necessary to create a trust. The settlor places the property into the trust. The trustee holds and manages the property of the trust for the benefit of the people the settlor designated as beneficiaries of the trust. The beneficiaries receive the property of the trust, or in the case of a charitable remainder trust, the profits garnered by the trust. The res refers to the property of the trust. Money, land, stocks, bonds and many other types of property can make up the res of a trust.
Charitable Remainder Trust
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A charitable trust serves the purpose of bestowing a substantial amount of social benefit on the public at large or to a reasonably large class of people. A charitable remainder trust is a special type of tax-exempt trust. The settlor creates such a trust to benefit a recognized charitable organization. The beneficiaries of the charitable remainder trust receive income from the trust.
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Creation by Will
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A charitable remainder trust created by a will is a called a testamentary charitable remainder trust. A testamentary charitable remainder trust provides income for the testator’s family, while the remainder goes to the charity. The trust property belongs to the charity, while income from the trust belongs to the beneficiaries.
Help in Setting Up
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A testator can ensure that his charitable remainder trust is set up by will by enlisting the help of an experienced estate planning attorney. The estate planning attorney can help the testator to correctly set up the trust by including a settlor, the trust res, a beneficiary and a trustee in the testator‘s will. Failure to properly provide for the creation of a testamentary charitable remainder trust could cause the testator’s intent not to be carried out.
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