Going through the process of estate planning is all about making sure an individual's assets and property wind up in the right hands upon passing away. Although close relatives are often top candidates to receive these assets, people may also have strong connections to certain charitable causes or organizations.
In terms of charitable contributions, people might only consider making monetary gifts to an organization. Although it is possible to make a direct bequest in a will or fund a charitable trust, it's also important to recognize that real estate can also be included in a revocable trust for charitable purposes.
As we covered in an article on our firm's site, it is possible to include a family home in a revocable trust. Although many people might consider naming relatives as the beneficiaries of a land trust, a charitable organization can also be recognized as the beneficiary. In many cases, the organizations would benefit from selling the property.
In many ways, funding a trust for charitable purposes has advantages. Not only can testators create specific conditions for administering assets or property to a charity, but the burden of estate taxes and probate could be avoided.
Making the effort to benefit a charitable organization is a great way to preserve a person's legacy, which is why careful steps should be taken when including real estate in a charitable trust. One aspect of this is to ensure that the charity named as beneficiary to the trust is an upstanding organization. The Michigan Attorney General's office requires charities to register with the state. By keeping track of the organizations within the state, the hope is that the potential beneficiaries of the charity (the general public) are protected.
After ensuring the validity of a charitable organization's mission and the strength of an estate plan, people can have peace of mind that their good deed won't be punished.
Source: Attorney General of Michigan, "How and Why the Michigan Attorney General Supervises Charitable Trusts," David W. Silver, Marion Y. Gorton and Joseph J. Kylman, accessed April 16, 2014