Sometimes Massachusetts residents decide that they want to do some good in the world while also receiving some benefits themselves. One way to do this is to create what’s called a charitable remainder trust. This kind of trust has one or more named beneficiaries. The beneficiary could be a loved one. It could even be yourself.
The charitable remainder trust makes prearranged payments to you or the beneficiaries, usually until death. Then whatever remains will be given to the charities you select.
In return for giving the remainder of the money to charity, there are some benefits. These benefits don’t simply involve feeling good about helping the charity of your choice. You may receive significant tax savings from your charitable remainder trust. Specifically, you can benefit from the tax-free sale of your property when you transfer the property into the trust and sell it under the ownership of the trust.
In this context, you will not need to pay capital gains taxes on the sale. Your family can also benefit from not needing to pay estate taxes on the assets within the trust when you die.
In order for a trust to qualify as a charitable remainder trust, it needs to meet specific standards. These standards are delicate, and there are a lot of different “moving parts” and calculations to keep track of. Therefore, Massachusets residents may want to work with an experienced attorney while creating their charitable remainder trusts. If you would like to learn whether such a trust could benefit you and your family, review our website for more information.