Plenty of people intend to accomplish philanthropic goals through their estate and may consider irrevocable trust tools such as a charitable remainder trust, but it is important to be cautious about how you choose to use this. While it might be the right choice for your goals, you need to carefully balance your own financial needs alongside that, especially when using an irrevocable trust for estate planning purposes.
Charitable remainder trusts are usually created while the grantor is still alive. Assets are then transferred into the irrevocable trust providing a tax deduction for the contribution as well as the added benefit of an income stream for life.
At the time the trust grantor passes away, the charity keeps any remaining assets. Be aware though that the irrevocable aspect of these trusts means you should carefully consider working with your financial professional, accountant, lawyer and someone from the charity before signing away your assets.
Even though you may not need these assets at this point in time, you could experience changes in your life, or beneficiaries who did not need support before suddenly require financial assistance. Placing assets into an irrevocable trust, especially a charitable remainder trust, makes those assets illiquid and inaccessible in the event of a sudden change in financial circumstances. There are many different options available to you when it comes to estate planning for charitable purposes.
Make sure you consult with an attorney who is familiar with this area of the law. A lawyer in Maine or NH can walk you through which tools make the most sense for your personal situation.