Giving

Your contributions leave a lasting monument

Philanthropy: 1, love of mankind; altruism. 2, a benevolent act, gift, etc.

Leaving a lasting legacy

If you have substantial assets, a comprehensive, long-term estate plan is not optional-it's essential.

A well planned estate may be the best gift you leave your children. Without one, you can't be sure that your estate will go to the people and charities you'd choose.

Furthermore, unless you've protected your assets from the impact of estate taxes, much of your estate will never pass to your heirs because of estate taxes. Estate taxes alone in some cases can consume a large portion or of your estate.

Estate planning can be a difficult process for some people. The earlier you begin planning your estate, the more options you will have available. While you prepare your own estate plan, why not discuss the same with your parents or grown children?

…However whatever you do. Don't delay

Our government acknowledges the importance of charitable contributions by allowing these contributions to be deducted, within limits, for income,-and estate taxes purposes. If you satisfy certain requirements, the tax laws also allows you a deduction for contributions of property where trusts are used to split ownership interests between charitable and non charitable beneficiaries.

The Charitable Lead Trust

You may think of a charitable lead trust as the "reverse" of a charitable remainder trust. With a charitable lead trust, the charity gets the income during the term of the trust, rather than a non charitable beneficiary. Consequently, the non charitable beneficiary receives the trust property at the end of the trust term.
As with a charitable remainder trust, your use of a properly drafted charitable lead trust can result in significant income tax savings thanks to the availability of the income tax charitable deduction. Using a charitable lead trust is most appropriate if you have little need for additional income and are willing to give up some current income to secure tax advantages.

The Charitable Deduction

With a charitable remainder trust, the charitable income-tax deduction is maximized if the trust payment is lower, and the term of the trust is shorter, since the amount the charity will ultimately receive will be higher.
With a charitable lead trust , one in which the charity gets the income and someone else gets the remainder, the opposite is true: the higher the payment and the longer the term, the larger the charitable income-tax deduction.

For both charitable lead trust and charitable remainder trust, the value of the charitable organization's interest is determined by using IRS tables and formulas. The government's tables currently assume a 7% interest factor and are unisex in format.

To illustrate, if you place $200,000. In a charitable remainder annuity paying the income beneficiary $10,000. Per year for 10 years. Your charitable contribution deduction would be approximately $77,109. If you instead, create a charitable lead trust giving the charity the income interest, your deduction would be $61,446. (these figures assume a single, end of year distribution; earlier and more distribution will change the numbers slightly.)

Deductions for charitable trusts are subject to the Internal Revenue Service Code's overall limitations on deductions for charitable contributions. These limitations allow taxpayers to deduct no more than set percentages of their adjusted gross incomes. Applicable limitations depend upon the type of property contributed and the identities of each donor and charity.

Other Benefits

Your contribution to a charitable remainder or charitable lead trust receive favorable gift and or estate tax treatments. Gifts made during your lifetime entitle you to a gift tax charitable deduction, while charitable contributions made in your will may reduce the estate taxes through the estate tax charitable deduction.

Conclusion

Charitable gifts made in trust can be an effective way to reduce your tax burdens while satisfying your philanthropic inclinations. Gifts of sizable amounts invariably require the help of professionals.

We are here to help when it comes to setting up and administering charitable trusts. With our help, a charitable trust can be used to further both your charitable and your other planning objectives.

Charitable Lead Trust

Charitable Gift Annuity

Charitable Remainder Trust

Charitable Pooled Income Fund

History of income tax, and the charitable deductions