Those in Woodland Hills who have assets they would like to be managed for the benefit of others may find a trust to be an effective tool at doing so. The same may be said for people who wish to use their personal assets to benefit a favorite charity. Those who would like their trust’s property to do both may be able to do so through a split-interest trust. The Internal Revenue Service defines a split-interest trust as one for which a portion was allowed a charitable deduction, while the remainder may be subject to the same tax requirements as a private foundation.
In simpler terms, with a split-interest trust, one can pass a portion of his or her wealth to a beneficiary while also contributing to a charitable organization. Such trusts are set up using one of two different payment methods. The first is a charitable lead trust, which pays income to a charity for certain period of time, and then sees the remainder interest pass to its beneficiaries. A charitable remainder trust, on the other hand, follows the exact opposite payment method.