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Families can benefit from charitable trusts

When an Oklahoma family has amassed a high level of wealth, passing that wealth along to future generations is often a primary focus within estate planning. In many cases, charitable giving is also an important consideration, and many families will turn to charitable trusts to accomplish that goal. Fortunately, it is possible to structure a trust that will fund charitable efforts while also providing a benefit to one's chosen heirs.

One strategy for charitable giving is to establish a family foundation that is funded by a carefully structured trust. A trust can be created that remains viable for a predetermined period of time. At the time of creation, the trust is funded with cash, stocks, bonds or other assets. The trust will in turn fund the family foundation via an annuity, and the foundation will be required to pass at least five percent of the accumulated wealth on to various charities.

Once the predetermined period of time expires, any assets remaining within the trust are distributed to the named beneficiaries. That wealth will pass on without incurring any form of income, gift or estate tax. This gives heirs an incentive to take an active role in the family foundation and to choose charities that have a solid track record. At the end of the day, the assets that remain within the trust at the time of expiration will be passed down to one's heirs, and that fact gives one's children and grandchildren the chance to manage their wealth while also giving to those in need.

Charitable trusts can play an important role within the estate planning process. With the right degree of advance planning, a trust can be structured in a way that allows family members to play an active philanthropic role. It also allows a vehicle through which to pass on assets free of excessive taxation. In the end, it is a great solution for Oklahoma families.

Source:, "Why Charitable Donations Are Great for Your Retirement and Estate Planning", Jason Notte, June 12, 2015

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