(316) 330-4110Wichita Charitable Planning & Trust Attorney
We Help You Create a Lasting Legacy
At the Law Office of Andrew Rowe, P.A., we understand that charitable giving is a core part of many individuals’ estate plans. Whether you are a dedicated philanthropist or simply wish to leave a portion of your estate to a cause you care about, we can help you integrate your charitable goals with your financial and legal strategies. By utilizing tools such as a charitable trust, we can help you continue supporting those in need while also providing significant tax benefits and long-term asset management for your family.
What is a Trust?
To understand a charitable trust, it helps to first understand what a trust is. All trusts must have the following players when created:
- A grantor or donor is the person who creates the trust and transfers personal property and assets into it.
- A trustee is a trusted person who manages the trust and can administer its property and assets when necessary, according to the wishes of the grantor.
- Beneficiaries are those the grantor would intend to benefit from the assets and property within the trust.
In most instances, the person who creates the trust can act as both the grantor and the trustee. They can create guidelines of succession, meaning if they were to become incapacitated or die, a new trustee would take on management of the trust.
Trusts play many roles in the estate planning process. They can lessen the impact of the probate process, help care for minor children, and are more private, as probate is a public affair while trusts are not.
What Is Charitable Planning?
Charitable planning is the strategic process of organizing your philanthropic giving to maximize benefits for both the recipient and the donor. It involves more than just writing a check—it’s a thoughtful approach that can help you reduce income, gift, and estate taxes, protect your assets, and ensure your legacy has a lasting impact. Our firm specializes in advising clients on various charitable giving vehicles, including the creation and administration of charitable trusts, to ensure your financial and philanthropic objectives are met.
What is a Charitable Trust?
A charitable trust is a structured legal entity that provides you with a way to support a charity while also benefiting yourself. It involves the same players as above, with the “grantor” being called the “donor” instead.
There are two main types of charitable trust, each with their own subclasses. They are as follows:
- Charitable remainder trusts provide income to you and the beneficiaries for a period of time and then distribute the remaining assets to the charities you choose. It has two subtypes:
- Charitable remainder annuity trust (CRAT), which pays a fixed annuity to the beneficiary each year.
- Charitable remainder unitrust (CRUT), which pays a fixed percentage of the trust assets to the beneficiaries each year.
- Charitable lead trusts provide income to the charitable organizations of your choice for a period of time, and then the remaining assets are distributed to you or other beneficiaries. It also has two types:
- Charitable lead annuity trust (CLAT) pays a fixed annuity amount to the charity each year.
- Charitable lead unitrust pay a fixed percentage of the trust assets to a charity each year.
Charitable trusts are typically irrevocable, meaning once they are created and assets are placed in them, they cannot be easily undone or changed. The assets within the trust will be permanently dedicated to those charitable purposes.
How a Charitable Giving Lawyer in Wichita Helps You Choose the Right Giving Strategy
Charitable giving is deeply personal, and the strategy that works for one family may not suit another. A charitable planning attorney in Wichita can evaluate your financial picture, philanthropic goals, and estate planning needs to recommend the giving approach that delivers the greatest impact for both you and the organizations you care about.
Donor-advised funds offer a flexible alternative for individuals who want to make charitable contributions and receive an immediate tax deduction without committing to the complexity of establishing a trust. You contribute assets to the fund, take the deduction in the year of the gift, and then recommend grants to qualified charities over time. A charitable giving lawyer in Wichita can help you determine whether a donor-advised fund or a charitable trust better aligns with your long-term objectives.
Gifts of appreciated assets allow you to donate stocks, real estate, or other investments that have grown in value without triggering capital gains taxes. This strategy can be incorporated into a charitable remainder trust or used as a standalone gift, depending on your circumstances.
Planned giving through your estate enables you to designate charitable beneficiaries in your will, trust, retirement accounts, or life insurance policies. Each vehicle carries different tax implications, and a charitable planning lawyer in Wichita can coordinate these designations to maximize the benefit to your heirs and the charities you support.
At the Law Office of Andrew Rowe, our role is to connect your charitable giving goals with the legal and financial strategies that make your generosity as impactful and tax-efficient as possible.
A Charitable Trust Attorney You Can Rely On
Creating a charitable trust that adheres to all legal and tax guidelines can be a complex process. Our role is to guide you through this journey with precision and care. We will help you understand the different types of trusts, such as Charitable Remainder Trusts and Charitable Lead Trusts, and determine which structure best fits your goals. We work to ensure your charitable trust is properly established, managed, and follows all strict legal guidelines, so you can have peace of mind knowing your legacy is secure and your family will benefit from a more tax-efficient estate.
What Are the Benefits of a Charitable Trust?
Besides the benefits that such trusts bring to the charitable organizations for which they are created, there are also benefits that you and your family may experience.
Tax Benefits
You can see immediate benefits from tax deductions based on the current value of the assets within the charitable trusts you create. You can actually bypass capital gains taxes when you place certain assets into the trust.
Asset Protection
When you place assets into a charitable trust and abide by the rules around that trust, you can benefit from a level of asset protection by removing those assets from your estate. Assets in charitable trusts are often shielded from creditors because they must adhere to strict legal guidelines.
Estate Planning
You maintain minor control over the assets within the trust and can dictate terms of income distribution and charitable beneficiaries through the trust agreement. This allows you to transmit wealth to your heirs in a tax-efficient way.
Charitable Growth Within Your Community Foundations
Your legacy is more than your wealth and family; it is how you are remembered and respected in your community. When you and your family are recognized as philanthropists, it can cement your place in your community as helpers and givers. You will inspire your community, and your community will rally around you!
What Are Some Drawbacks?
Creating a charitable trust that follows all of the legal guidelines can be a complex process that requires diligence to ensure it always adheres to the strict guidelines that monitor these types of trusts.
Charitable trusts are often irrevocable trusts, which means that once you create and move assets to the trust, you will not be able to change your mind. Doing so can result in legal issues that can incur costs.
One of the major benefits of a charitable trust is the tax benefits. But these benefits take time, and you and your beneficiaries may not see the total value of such tax benefits for a long time. Even worse, when this type of trust is mismanaged or inaccurately reported, or violates tax law, it can result in bigger tax liabilities.
It is important to remember that in order for a charitable trust to be valid, it can only make donations to qualified charities, limiting your choices of beneficiaries.
Common Mistakes to Avoid When Establishing a Charitable Trust in Kansas
Creating a charitable trust is a powerful estate planning tool, but errors during the setup process can lead to unintended tax consequences, compliance issues, and even the invalidation of the trust itself. Working with a charitable planning attorney in Wichita from the beginning helps you avoid the most common pitfalls that undermine the effectiveness of charitable giving strategies.
Failing to properly value contributed assets. When assets like real estate, business interests, or closely held stock are transferred into a charitable trust, they must be appraised accurately. An incorrect valuation can trigger IRS scrutiny, result in denied deductions, or create penalties that far exceed any tax benefits the trust was designed to provide.
Choosing the wrong trust structure. The decision between a charitable remainder trust and a charitable lead trust depends on whether you want income now with charitable distributions later, or the reverse. Selecting the wrong structure can leave you or your beneficiaries with less income than anticipated or reduce the charitable impact you intended. A charitable giving lawyer in Wichita can model both scenarios to help you make an informed decision.
Neglecting ongoing compliance obligations. Charitable trusts require annual tax filings, accurate record-keeping, and strict adherence to distribution requirements. Missing these obligations can jeopardize the trust’s tax-exempt status and expose you to significant penalties.
Naming unqualified charitable beneficiaries. Only organizations recognized by the IRS as qualified charities can receive distributions from a charitable trust. Including an ineligible organization can invalidate the trust’s tax benefits entirely.
How Can You Ensure Compliance?
If you are interested in continuing your contributions to a charity after you are gone, or you see the inherent value that a charitable trust offers but are weary of the legal implications involved, then you should call The Law Office of Andrew Rowe to find out how we can help you get the ball rolling, and make sure your giving nature benefits who you want it to!
The Law Office of Andrew Row has the experience necessary to help you create a trust that benefits the public and private charities you wish, while alleviating some of the tax burdens you and your family have to pay for your estate.
Call 316-330-4110 to schedule your consultation and find out how charitable giving can actually benefit your estate planning goals!