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Maryland residents may be interested in charitable trusts

It is not uncommon for individuals to want to leave part or all of their estate to charitable organizations. If this is an action that interests Maryland residents, they may wish to find out more information on charitable trusts. These trusts could be used to distribute funds to charities in the manner detailed in the terms of the trusts.

One type of charitable trust is a charitable remainder trust, or CRT. With a CRT, and other types of trusts, individuals put funds or assets into the trust, and the money from that trust is paid back to the individuals or to other non-charitable people or organizations. When the trust's term is up -- often when the creator dies -- the remaining funds in the trust are then distributed to the charitable organizations designated by the benefactor. 

The second type of trust is a charitable lead trust, or CLT. A CLT allows individuals to create a fund in which the money is paid out to the charitable organization or organizations for the term of the trust. When the term is up, the remaining funds or other assets are then transferred to a non-charitable organization or individual. 

Charitable trusts can be beneficial tools for individuals looking to potentially avoid tax issues and/or to ensure that the majority of their gift makes it to the designated charities. Maryland residents who are interested in setting up this type of trust may wish to discuss their wishes with experienced attorneys. These legal professionals could assist when it comes to deciding which type of charitable trust may work best for the particular desires.

Source: gobankingrates.com, "Revocable Trusts, Irrevocable Trusts and the 6 Other Trust Accounts You Can Open", Terence Loose, Sept. 30, 2016

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