How charitable trusts can be useful
When it comes to estate planning in South Carolina, charitable trusts can be very useful. However, it’s important to understand that charitable trusts differ from other types of trusts. One of the main differences is that it is not necessary for a charitable trust to identify a beneficiary. Instead, these trusts are established for the public good.
Charitable trusts can also continue for perpetuity. This is not the case with most trusts, which are subject to the Rule Against Perpetuities. The idea behind the rule is to avoid situations in which property associated with an estate is restricted for a long time. An example would be not allowing a trust to say that a piece of land must be kept in the family forever. However, an exception is made for charitable trusts since the intention is for the overall public good.
Courts can take steps to keep charitable trusts functioning. The “Cy Pres” doctrine allows courts to modify them if necessary. An example might be a charitable trust that is set up for the benefit of an educational foundation that ceases to exist. A modification could allow it to support a different foundation. A court might also alter specific rules of a trust, such as one in which the age of orphans cared for was expanded.
Someone who is creating an estate plan may want to talk to an attorney about the uses of charitable and other types of trusts. For example, a revocable trust can be a powerful tool in estate planning that allows the creator to maintain control over the assets. Conditions can be placed on distributions to beneficiaries from trusts if there are family members who may spend irresponsibly. Distributions might only happen when the beneficiary reaches a certain age or another milestone.