Have you thought about the end of your life and how to handle your assets after you’re gone? Estate planning covers a wide range of important topics, including financial power of attorney, health care proxy, beneficiaries, probate, wills, trusts, executors and estate and inheritance taxes.
A Charitable Trust is a way to set up your assets to benefit you, your beneficiaries, and a charity — all at the same time. A charitable trust could offer many financial advantages for philanthropically minded individuals with nonessential assets, such as stocks or real estate.
A will is a legal document that outlines how a person's assets will be distributed after their death, while a trust is a legal arrangement where a trustee manages assets for the benefit of beneficiaries, with greater flexibility and potential tax benefits than a will.
Estate tax is paid by the deceased person's estate on the net value of their assets, while inheritance tax is paid by beneficiaries on the assets they receive from the estate, with estate taxes going to the government and inheritance taxes going to state governments (in certain states).
The generation-skipping transfer tax was created by Congress in 1976 to close a loophole that allowed individuals to avoid estate taxes. The tax applies to assets given to grandchildren, great-grandchildren, or any younger recipient that bypasses one generation and could trigger a tax liability even for establishing a trust.