An alumnus of Memphis State University, Richard T. Howard is a manager of trust services with CDAMT in Newport Beach, CA, where he has provided legal services to trusts on behalf of more 1,100 clients. Richard T. Howard is also a trust facilitator with Masters Copyrights, LLC. In this role, he helps produce and market private, real estate, and charitable trusts, among others.

A charitable trust refers to a set of assets designated for philanthropic use and, in many cases, is established for the purpose of creating a charitable foundation. These assets are managed by the charity, which is then entitled to some, if not all, of the tax-free interest they generate via annual payments known as annuities or unitrusts. There are two basic types of charitable trusts: lead trusts and remainder trusts.

A lead trust is one that is controlled by the donor and generally passed down to his or her beneficiaries following its expiration, whereas assets in a remainder trust are signed over to the specified charity following a certain amount of time. The Bill and Melinda Gates Foundation Trust is the most prominent example of a remainder trust. It has assets in excess of $30 billion and expires 50 years after their deaths.

While philanthropy is a primary objective of establishing a charitable trust, they also have tax-related benefits. Donors who own highly appreciated assets can receive federal income tax deductions dependent upon the trust’s value.