GIFTING AND CHARITABLE PLANNING
Making gifts to charities is very personal for each and every client, and we are available to discuss your individual wishes with you. Whether you wish to make gifts outright to one or more charities, or set up a plan to allow for long term annual giving, we are happy to assist you in planning and carrying out your wishes.
Here are a few samples of the types of instruments we can utilize to implement your charitable giving:
Charitable Remainder Trusts ("CRT”), can provide income for the donor(s)for a term of years or the remaining life of the donor, or surviving donor where a couple has made the gift. At the end of the trust term, or after the death of the surviving donor, the trust assets pass to the charitable organization.The charitable remainder beneficiary can be any qualified charitable organization or can even be the donor’s private foundation, created to fund specific charitable activities.
Charitable Lead Trusts ("CLT”), can provide income for the charitable organizationfor a term of years or the remaining life of the donor, or surviving donor where a couple has made the gift. At the end of the trust term, or after the death of the surviving donor, the trust assets pass to the donor’s designated beneficiary. The charitable lead beneficiary can be any qualified charitable organization.
Qualified Personal Residence Trusts ("QPRT”), allows for the gift of your residence to a QPRT, with the grantor retaining an interest for a specified term of years. This gift allows for the appreciation of the residence to grow in the QPRT, outside the grantor’s estate. At the end of the term of years ownership of the residence passes to beneficiaries of the QPRT, and if the grantor(s) wish to remain in the residence, they will be required to rent the residence from the new owners at fair market rent. Even with the burden of paying rent, in a rapidly appreciating housing market, a QPRT may still be an excellent vehicle to get the residence out of the grantor’s taxable estate.
Irrevocable Life Insurance Trusts ("ILIT”)can be used to provide liquidity for the payment of estate taxes, debts and expenses of administration, or provide a beneficial distribution to trust beneficiaries.The ILIT owns an insurance policy on the life of the grantor, or possibly both spouses. On the death of the grantor, or second spouse, the face value of the policy (less any loans) is paid into the ILIT, and is managed or distributed from there. The grantor(s) have no control over the assets in the ILIT, and only make annual gifts to the ILIT, sufficient to cover the annual premiums for the policy. The payoff of the policy is not part of the grantor’s estate.
Donor Advised Fund or "DAF” is an excellent vehicle for creating a charitable legacy for you and your family by contributing cash, securities or other appreciated assets to a sponsoring organization that will then make contributions from the DAF to charitable organizations that are important to you. Contributions to the DAF create an immediate tax deduction, and as the donor, you retain input in working with the sponsoring organization to determine charitable organizations to receive distributions from the DAF.
Private Foundations may be created by a family or business organization that wishes to establish a long term charitable planning legacy and retain control of the charitable distributions made annually. A private foundation is not a public charity and while it requires strict compliance in accepting donations as well as government reporting, many families with large sums to donate prefer their own foundation to a DAF because it offers them absolute management and control.