As part of your estate planning, you may have a desire to help both your family and to give to a charity with a mission that's near and dear to your heart at the same time. If this is something that you have plans of doing, then you may want to consider setting up a split-interest trust. There are two different types of these.
First, there's the charitable lead trust (CLT) and then there's also a charitable remainder trust (CRT). Which one you pick to set up may be affected by the way you arrange your estate, including what type of assets you decide to donate and how you intend for the benefactor to receive your gift.
There's one notable difference between the CRT and CLT. With the former, individuals are able to benefit from receiving income interest with the remainder going to a charity. The opposite happens with CLTs in that over the course of years while the patron is still alive, a charitable organization may receive income interest. It's only after the trust's term has ended that individuals may receive the remaining assets contained within it.
Both of these trusts allow the person setting it up to select when they want the charitable donation to be made, who receives the remainder or income interest and whether disbursements will be made as streamed income or paid as a lump sum.
Individuals often place their assets into trusts to reduce their own income or estate tax obligations or the gift taxes their heirs have to pay. Setting up a trust can also preserve the value of high valued assets and be a way for property that doesn't produce and income to do so. Trusts can be complex to understand, so you may benefit from discussing the one that's right for you with a Melbourne trust litigation attorney who can explain the difference.