Many New Jersey families have amassed a considerable amount of wealth. When considering estate planning options, many of these families are looking for ways to minimize their estate tax obligation while also allowing their wealth to have a positive impact, both for their heirs and for society in general. One option that meets both of those objectives is the creation of a family foundation funded by a charitable trust.
With the right structuring, a charitable trust can be created that has a predetermined period of viability. The trust is funded in much the same way as any other trust -- by means of cash, stocks, bonds or other assets. The trust pays the foundation annually in the form of an annuity. The family foundation, which is created at the same time as the funding trust, is tasked with determining how the charitable distributions will be made. At least 5 percent of the trust's assets must be distributed to various charitable organizations.