If you are considering using all or part of your estate to financially support a cause that is important to you, the best way for you to do that is to include a charitable trust in your estate plan.

A charitable trust may sound like something that only the very wealthy can take advantage of. Actually, anyone can take advantage of a charitable trust. Also known as a “split-interest trust,” this form of trust allows you to use some of your assets to help a charitable cause while leaving the rest to your children or other beneficiaries.

The types of charitable trusts

There are two forms of charitable trusts:

Under a Charitable Remainder Trust, using the assets placed in the trust, you or a beneficiary can receive an income, either a fixed amount or a percentage of the trust’s value. The charity serves as trustee for the beneficiary’s lifetime or a fixed period of years, whichever you choose. Then the remaining assets in the trust go to the charity. This is the most popular type of split-interest trust.

Charitable Lead Trusts work the opposite way by first giving income from the trust to the charity, usually for either the trust maker’s lifetime or a fixed period of years. Once you pass away or the charitable period ends, the remaining assets in the trust go to your non-charitable beneficiaries, typically your children.

A charitable trust cannot be terminated once it is formed, meaning that the assets it contains will remain there. You must carefully consider if this type of trust is the best solution for your estate planning goals, and if so, which charity is the most meaningful to you and your family. A consultation with your estate planning attorney can help you with this.