People who live in Missouri may have heard of charitable trusts but wonder what they are and whether they are useful. Charitable trusts can provide tax advantages to their donors, but the charity they benefit must be examined by a court to determine whether or not it qualifies as a charity.
A charity must serve a section of the public. It must be for a substantial segment of that public, but it cannot be for everyone. For example, that section might be children of veterans. A charitable trust might also establish a memorial statue or take care of animals.
There are other requirements for a charitable trust. It must be established for a charitable purpose, and it must be specifically designated as such. In a trust with both charitable and non-charitable purposes, the charitable portion must be separable from the non-charitable portion or the trust will fail. A charitable trust differs from a private trust in several ways. While a trustee administers the trust just as would be the case with a private trust, the state attorney general enforces a charitable trust. This means that others, such as beneficiaries, are not permitted to maintain a lawsuit to enforce the trust. Furthermore, a charitable trust can have an unlimited duration.
Due to these types of complexities in establishing a charitable trust, an individual who wishes to do so may want to consult an attorney. People may wish to establish a charity both to help a cause or population they feel strongly about and to obtain a tax benefit. There are different types of charitable trusts, and an attorney may be able to assist a client in choosing the right one depending on the situation and the particular aims of the grantor.