Charitable Planning

Charitable Planning

Charitable planning is an effective tool to carry out benevolent ventures and ambitions, but can also provide significant income tax and estate tax benefits.

Charitable planning often includes outright gifts to charity, such as bequests provided for you in your will or by virtue of beneficiary designations of retirement accounts. More sophisticated charitable planning may include the use of a tax-exempt charitable trust or a “split-interest trust” such as a charitable remainder trust or charitable lead trust.

Charitable Remainder Trust (“CRT”)

A charitable remainder trust is an irrevocable trust that provides for a specified distribution, at least annually, to one or more beneficiaries. At least one of the beneficiaries must be a non-charitable entity, who is a beneficiary for the rest of his or her life or a term of years. Once the beneficiary passes or the term of years expires, one or more qualified charities receives the remainder interest. Because the remainder interest is a commitment to a charitable endeavor, the federal tax code provides a variety of tax benefits for the grantor.

Charitable Lead Trust (“CLT”)

A charitable lead trust is similar to a charitable remainder trust, but works in the opposite direction. The qualified charitable organization receives its benefit first, prior to the non-charitable beneficiaries. For example, a charity may receive income from the assets placed in trust for a fixed time or during the lifetime of the donor. Upon the termination of that time period, the assets revert back to the grantor’s estate or to named beneficiaries. If structured correctly, the creator or grantor of the trust is eligible for certain tax deductions and exemptions. It allows you to provide a meaningful gift to your favorite charities while also providing valuable tax benefits as well.

Private Foundation

A private foundation is a nonprofit organization that is usually created via a single primary donation from an individual or a couple and whose funds and programs are managed by its own trustees (if organized as a trust) or directors (if organized as a business). Private foundations can be controlled by related parties and be funded by a relatively small group. A private foundation generates income by investing its initial donation, often disbursing the bulk of its investment income each year to desired charitable activities. Private foundations can be organized as an operating foundation, which actually run the charitable activities, or non-operating foundation, which disburses funds to other charitable organizations.

We Have the Experience You Need

Our attorneys have experience working with some of the largest estates.  We also help with more modest estates and one-time transactions, such as property transfers and planning.

We can handle just about every estate planning and trust matter.  This includes planning and drafting the documents, transferring property, transferring or reforming trusts, and representing the parties in court.  It also includes planning the estates to minimize tax consequences, preparing estate/gift and fiduciary tax returns and working on the audit review by the IRS, and representing the executor or administrator and others as they administer the estate.

Clients come to us during their lifetimes to find ways to deal with or manage assets or wealth.  We are honored to serve as counsel in these ongoing relationships.  This includes business owners, executives, investors, inheritors, and others who realize that they need a plan to transfer and protect their assets.  It can also include coming up with a plan for who is to care for minor or incapacitated children.

If you need help managing your estate or planning for charitable planning for your estate, we want to hear from you.

Need more information?

Contact our charitable planning attorneys to see how we can help with your estate planning needs.