Charitable Planning

Federal and state taxes exempt transfers of wealth and gifts to charities. Many people include some gift to charity as a part of their estate plan, whether it is through a direct bequest, a planned gift, or establishment of a trust. For donors with assets in excess of the federal estate tax exemption, certain types of charitable trusts can provide some benefit to their families while also benefitting their charity of choice.

A Charitable Remainder Annuity Trust is a trust set up with fixed payments for no more than 20 years which is irrevocable to a charity. Payments are made to a beneficiary for some period of time, and then the remainder goesto charity. This provides an income tax deduction and gets money out of the taxable estate.

A Charitable Lead Trust is the reverse. It has fixed payments to a charity for no more than 20 years with the remainder to some individual beneficiary. It is also irrevocable. This type of trust removes assets from the taxable estate and minimizes the gift tax on the transfer to remainder beneficiary.