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Charitable Planning

Client Centered

Charitable giving provides many positive effects such as personal satisfaction for the donor and reductions in estate and income tax. Donations reduce estate size and are deductible during the donor’s lifetime.

Special charitable trusts offer all of the above benefits while providing the client with income from the gifted asset. Many people prefer using philanthropic gifts to reduce their estate tax liability because they believe a charity or foundation better spends their dollars. By using a foundation, the donor can better control which people/causes the money will help.

How It Works

The three most common charitable planning techniques are the use of Donor Advised Funds (DAF), Charitable Remainder Trusts (CRT), and Charitable Lead Trusts (CLT). There are many ways to design planned giving to maximize your family’s needs and goals.

Charitable Gifts: Three Types

  • Direct gifts to a specified charity (lifetime gifts or bequests)
  • Direct gifts to a specified charity (lifetime gifts or bequests)
  • The creation of a charitable family foundation
  • Special charitable trusts

Charitable Gifts Using Life Insurance

As an alternative to leaving cash or other estate assets to a charity, many donors find life insurance a convenient charitable gift. Charities will purchase a life policy on a donor, and the donor makes annual income tax-deductible gifts each year to the charity to pay for the premiums. This is a popular technique because, unlike bequests at death, the yearly donation is income tax-deductible. A donor can also own a policy on his/her own life and name the charity as beneficiary.

Additional Resources

<p>Charitable Giving: Smart from the Heart</p>

Charitable Giving: Smart from the Heart

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