Charitable Giving and Trusts in a Florida Estate Plan: A Guide for Out-of-State Property Owners

Charitable giving in a Florida estate plan means using legal tools — most often trusts, but also bequests, beneficiary designations, and lifetime gifts — to direct part of your wealth to causes you care about while you are alive or at death. Charitable trusts, in particular, let you support a nonprofit and still draw income, capture an income-tax deduction, and reduce the taxable size of your estate. For someone who owns a home in Florida and another on Long Island, the planning has an extra wrinkle: your charitable plan has to work cleanly across two states’ laws.

I have sat across the table from a lot of “snowbirds” — clients who winter in Naples or Boca and summer in Nassau or Suffolk County — and the charitable conversation almost always starts the same way. They want to give, they want a tax break, and they are nervous about giving away an asset they might still need. Those goals are not in conflict. The structure just has to be right.

Why charitable trusts appeal to Florida and dual-state residents

Florida is unusually friendly to people who want to keep more of what they have. There is no state income tax and no state estate or inheritance tax, which Florida’s 2018 constitutional amendment locked into the constitution itself. That changes the math. For a dual-state resident, establishing genuine Florida domicile can mean the difference between New York’s estate tax (with its notorious “cliff” near the exemption amount) applying to you and not applying at all.

But here is the part people miss: the federal estate and gift tax still applies regardless of which state you call home, and federal income tax follows you everywhere. Charitable trusts are one of the few tools that work on the federal layer — the layer Florida residency does not erase. That is why so many of my charitably inclined Florida clients lean on them.

The two workhorses: charitable remainder trusts and charitable lead trusts

Most charitable trust planning comes down to two structures that mirror each other.

Charitable remainder trust (CRT)

A CRT pays income to you (or another non-charitable beneficiary) for a term of years or for life, and whatever remains at the end goes to charity. You contribute an appreciated asset — say, a stock position or a piece of New York real estate you no longer want to manage — and the trust can sell it without you personally recognizing the capital gain up front. You get an immediate partial income-tax deduction for the present value of the charity’s remainder interest, and the asset leaves your taxable estate.

There are two flavors:

• CRAT (annuity trust): pays a fixed dollar amount each year. Predictable, but no inflation hedge.
• CRUT (unitrust): pays a fixed percentage of the trust’s value, recalculated annually. Your payout rises and falls with the portfolio.

The IRS sets guardrails. The annual payout must be at least 5% but no more than 50% of the trust assets, and the charity’s projected remainder must be worth at least 10% of the initial contribution. Get those wrong and the trust simply does not qualify.

Charitable lead trust (CLT)

A CLT flips the order. The charity receives the income stream first, for a set term, and the remainder passes to your heirs at the end — often at a substantially discounted gift- or estate-tax value. CLTs shine in a high-interest-rate environment and for clients who want to move appreciating assets to children or grandchildren while doing good in the meantime. I often see these used by families who have already secured their own retirement income and are focused on the next generation.

Florida law and the trust itself

Charitable trusts created in Florida live under the Florida Trust Code, Chapter 736 of the Florida Statutes. A few provisions matter directly to charitable planning:

• Section 736.0405 governs charitable purpose trusts and confirms that a trust may be created to benefit charity generally, even without naming a specific organization.
• Section 736.0413 codifies the doctrine of cy pres — if your named charity no longer exists or its purpose becomes impossible, a court can redirect the gift to a similar charitable purpose rather than letting it fail.
• Section 736.0110 gives certain charitable organizations the rights of a qualified beneficiary, meaning they are entitled to information and accountings — something to plan around if you value privacy.

For dual-state residents, the choice of governing law and the trustee’s location are not afterthoughts. A Florida-situs trust with a Florida trustee, administered under Chapter 736, helps cement the Florida connection that protects you from New York taxation. If your trustee sits in Manhattan and the trust is administered from a New York office, you have handed New York an argument it does not need.

Don’t overlook the simpler tools

Trusts are not the only way to be charitable, and they are not always the best way. Before drafting anything elaborate, I walk clients through the lighter-weight options:

1. Charitable bequest in your will. A clean, revocable, dollar-amount or percentage gift. Costs nothing during life and is fully deductible from your estate.
2. Beneficiary designation on a retirement account. Naming a charity as the beneficiary of an IRA or 401(k) is remarkably efficient. The charity pays no income tax on the distribution, while your children would. Leaving the IRA to charity and other assets to family is frequently the smartest split.
3. Qualified charitable distribution (QCD). If you are 70½ or older, you can transfer up to an annual limit directly from your IRA to a qualified charity, satisfying part of your required minimum distribution without it counting as taxable income.
4. Donor-advised fund. Contribute now, take the deduction now, and recommend grants over time. Far less expensive to set up and run than a private foundation.

I mention these because I have seen people pay good money for a CRT when a beneficiary designation would have accomplished the same goal at no cost. Match the tool to the asset and the objective — not to whatever sounds most sophisticated.

Coordinating charitable gifts with the rest of your plan

Charitable planning never happens in a vacuum. It has to fit alongside your will, your revocable living trust, and any specialized vehicles your family needs. A common one: families with a disabled child often pair charitable goals with a special needs trust so that giving to charity never accidentally jeopardizes a loved one’s eligibility for government benefits. The sequencing of who gets paid, and from which pool, is something to map out deliberately.

If a piece of New York real estate is part of the picture, remember that property is governed by the law where it sits. A Florida charitable trust can hold and ultimately sell New York real estate, but the transfer, recording, and any ancillary probate issues will involve both states. This is precisely the kind of coordination that benefits from counsel licensed and experienced in both jurisdictions. Our team handles the New York side through dedicated trust planning attorneys and the Florida side through the firm’s Florida estate planning practice.

Common mistakes I see with charitable trusts

• Funding a CRT with the wrong asset. Highly appreciated, low-basis assets are ideal. Cash or recently purchased stock wastes the trust’s biggest advantage.
• Ignoring the 10% remainder rule. Set the payout too high or the term too long for a young beneficiary, and the trust fails to qualify.
• Naming a Florida trust but running it from New York. Administration matters more than the address on the document.
• Forgetting the irrevocability. A CRT and CLT are, in almost all cases, irrevocable. Once it is funded, you cannot change your mind. Be sure before you sign.
• Skipping the appraisal. Non-cash gifts above the IRS threshold require a qualified appraisal to support the deduction. The IRS denies plenty of deductions on this technicality alone.

Is a charitable trust right for you?

If you own appreciated assets, want a reliable income stream, care about a particular cause, and want to trim your federal estate exposure, a charitable trust deserves a serious look. If your charitable goal is modest, a bequest, a QCD, or a donor-advised fund will likely serve you better and cost far less.

For dual-state owners especially, the value of the right structure compounds. You can honor your philanthropy, protect your income, keep New York’s estate tax at arm’s length, and pass more to your family — but only if the documents, the trustee, and the administration all point in the same direction. If you would like to talk it through, reach out to our office and we can look at your specific assets and goals together.

Frequently Asked Questions

Will moving my estate plan to Florida eliminate taxes on a charitable trust?

Florida has no state income, estate, or inheritance tax, which can eliminate New York’s estate tax if you establish genuine Florida domicile. But federal estate, gift, and income taxes still apply. Charitable trusts work primarily on that federal layer, which is why they remain valuable even for Florida residents.

What is the difference between a charitable remainder trust and a charitable lead trust?

A charitable remainder trust (CRT) pays income to you or another beneficiary first, with the remainder going to charity at the end of the term. A charitable lead trust (CLT) does the opposite — the charity receives income first, and your heirs receive the remainder, often at a reduced gift- or estate-tax value.

Can a Florida charitable trust hold real estate I own in New York?

Yes. A Florida-situs charitable trust can hold and sell out-of-state real estate, but the transfer, recording, and any ancillary probate are governed by the law where the property sits. Dual-state ownership benefits from counsel familiar with both Florida and New York rules.

Do I need a charitable trust to give to charity in my estate plan?

No. Simpler tools often work better. A charitable bequest in your will, naming a charity as your IRA beneficiary, a qualified charitable distribution after age 70½, or a donor-advised fund can accomplish the same goal with far less cost and complexity. Match the tool to the asset and the objective.

Are charitable remainder and charitable lead trusts reversible?

In almost all cases, no. Both are irrevocable once funded, meaning you cannot later change the terms or reclaim the assets. Because of this, it is essential to be certain of your income needs, beneficiaries, and charitable goals before signing.