What is a charitable trust?

A charitable trust is a type of trust that is created for the benefit of one or more non-profit organizations. These trusts are set up for the purpose of providing either financial support or other resources to those organizations in order to help them achieve their objectives. In Washington, charitable trusts are regulated by the Washington Trust Code and are exempt from certain tax rules. A charitable trust functions similarly to other types of trusts. An individual (often called the settlor or grantor) transfers property or assets to a trustee, who manages them on behalf of the beneficiary or beneficiaries. In this case, the beneficiary is usually a charitable organization. The trustee must adhere to the terms of the trust and use the assets to fulfill the objectives of the trust. This could include providing direct financial support, paying for specific projects, or providing other resources to the charity. The use of charitable trusts can be advantageous for the settlor and the beneficiary. The settlor may be able to enjoy the tax benefits associated with making a charitable donation, while the beneficiary receives a continuous stream of support that can be used to further its goals. Charitable trusts can also be customized to meet the particular needs of charities or donors. In Washington, anyone wishing to create a charitable trust must carefully review the applicable laws and regulations. The trust document must be carefully crafted and must include all necessary information. This can help to ensure the trust functions according to the wishes of the settlor and is used for the benefit of the designated charity.

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