What is a charitable trust?

A charitable trust is a legal document which allows an individual or organization to set aside funds for the benefit of a charitable cause, such as a disability plan. This type of trust is also referred to as a ‘charitable lead trust’. In California, this type of trust is used in order to make sure that funds are available to help provide for a person’s disability needs. For a charitable trust to be valid, the donor (or ‘grantor’) must specify how the trust’s principal and income are to be used in order to benefit the intended recipient. This includes how much of the principal is to be paid out and when, and what the income is to be used for. Any remaining funds that are leftover after the recipients’ needs have been met can then be donated to a charity or another non-profit organization. Trusts can also be used to provide for a disabled individual’s care after he or she passes away. This type of trust can be established to provide for the care of the disabled individual for a certain amount of time. After the chosen time period has passed, the remaining funds can be used for other charitable causes. Charitable trusts can be an effective tool for providing for the needs of a disabled individual. The trust allows the donor to control how the funds are used and ensures that the recipient’s needs are met in the way that they desire.

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