If You Are Thinking about a Charitable Remainder Trust, Read This First

Money in iceMany charitable-minded people like the idea of setting up a charitable trust to benefit their favorite non-profit in the future. Large charitable organizations have staff on hand to walk donors through the process of setting up charitable remainder trusts. Unless you are dealing with your personal attorney, however, he or she may not be responsible for informing you of all the potential pitfalls and protecting your best interests in the process.

Before your go through a charitable organization to set up a charitable remainder trust, seek the advice of a qualified estate planning attorney to discuss the possible drawbacks, including:

  • Charitable trusts are irrevocable. Once established, it is nearly impossible to undo a charitable remainder trust.
  • Charitable remainder uni-trusts carry inherent investment risk beyond your control unless you name yourself as the trustee. If a trustee makes investment decisions that turn sour, your payout shrinks.
  • The payout to you during your lifetime is largely fixed. Once you determine the percentage of the trust to which your annuity is tied, you can’t change it or access the principal, even if you run into an emergency in the future.

The point of this article is not to discourage you from establishing a charitable remainder trust, but to highlight some reasons you need experienced counsel to analyze your situation and make you aware of all the factors in such an important decision. We will dedicate future articles to highlighting the positive aspects of charitable remainder trusts.

Our team of experienced estate planning professionals takes the time to understand your circumstances and recommend a course of action to meet your goals. For more information about a charitable remainder trust or any other estate planning need, call an estate planning lawyer at the Peterson Law Group.  Our experienced Conroe, Texas attorneys help clients develop comprehensive estate plans, including drafting will and various trusts to fit their estate planning needs. Call us at 936-337-4681 or 979-703-7014 or contact us online to arrange an appointment.

About Chris Peterson

Chris Peterson is an attorney and the owner and founder of Peterson Law Group, a Texas law firm with offices in Bryan/College Station and Kingwood. He mainly practices in the areas of Estate Planning and Business Planning. Chris is also a Certified Estate Planner. Besides his law practice, Chris is a serial entrepreneur and community volunteer. He is known for his cutting edge law practice that utilizes technology to deliver efficient, excellent work.