New York residents who would like to give to charity and provide for their loved ones in their estate plan can do both with a charitable trust. There are two types of charitable trusts. With a charitable remainder trust, a person places assets in the trust and then chooses a time period for the trust to pay distributions. This might be for up to 20 years. It can also be for the lifetime of the beneficiary. After the term ends, the remainder of assets in the trust go to the charity. A charitable lead trust works in reverse in that it funds a charity for a certain period of time after which the remaining assets go to another beneficiary.
There are a number of advantages of charitable trusts. They can be used to reduce gift and estate taxes, and they can preserve the full market value of assets untouched by capital gains tax. They may allow income tax deductions and can also generate income from properties that were not otherwise doing so.