Public Trust

A Public Trust is another name for a Charitable Trust.

As the name implies, a Public Trust or Charitable Trust is an Irrevocable Trust established for charitable purposes.  This type of trust has one or more charitable beneficiaries, and may be set up during a donor’s life, or as a part of a Trust that activates upon death of the donor.   As opposed to a Private Trust—which is only designed to benefit one or more private individuals—a Public Trust is meant to benefit the public at large, or at least large sections of the general population.

Why would a Public Trust be of interest to you?  Well, property executed, a Public Trust entitles the donor the opportunity to deduct a portion of the amount contributed to the Public Trust as a charitable income tax deduction.  Depending on the amount of the Public Trust, that deduction could be sizable.

Public Trusts are established to both benefit a particular charity and to benefit the trust grantor as well.  The benefit to a particular charity is obvious; they gain much-needed funds.  The benefit to the grantor creating the trust is that they can lower the amount of estate taxes that the grantor will have to pay.

Both the IRS and the State Attorney General’s office takes these types of trusts very seriously; for that reason you don’t want to attempt to execute one on your own.

There are several types of Public Trusts.  Most are what is known as a “Split-Interest Trust.”

Simply put, Split-Interest Trusts are trusts that have two kinds of beneficiaries: both charitable and non-charitable ones.  Why might this type of trust be of interest to you?

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