What is a charitable trust?
A Charitable Trust is a specialized type of trust that does not have an individual beneficiary. Instead, the money in the trust is used for a charitable cause or purpose, such as to provide funds for a school, organization, or medical research. In California, a charitable trust must be formed under the laws of the state, and the trust must have a written document, referred to as a trust instrument, detailing the rules and regulations of the trust. The trust document also names a charitable purpose, names a trustee to manage the trust, and names one or more beneficiaries of the trust. Usually, the trustee is responsible for ensuring that the terms of the trust are followed and that the funds are used for the charitable purpose. Furthermore, the trust document often includes a provision that allows the trustee to modify the document as needed to better reflect the intention of the trust. In California, charitable trusts may also provide tax advantages for those who set up the trust and, depending on the trust, may also provide an income stream to the charity or organization that is the beneficiary of the trust.
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