Defining your charitable goals, developing the right strategy to make them a reality and enriching the lives of others can all be a most satisfying planning experience. Charitable giving creates an opportunity for your entire family to get involved in family philanthropy and encourage a tradition of giving.
Any beneficial transfer to a charity, either during your lifetime or at death, should be considered in the context of your comprehensive wealth plan. For instance, there are distinct advantages to making outright charitable gifts or you could employ an irrevocable trust to execute advanced charitable giving techniques such as a charitable remainder trust. The best assets to consider gifting to charity are appreciated ones so that you can avoid capital gain tax on the disposition while taking a charitable income tax deduction for the gift.
There are a host of different charitable giving techniques established in federal tax law to foster charitable gifts. Donor advised funds, charitable remainder/lead trusts, charitable gift annuities, and private foundations are examples of common tax-advantaged charitable giving techniques.
A wealth replacement strategy, which combines a charitable remainder trust with life insurance owned by a separate irrevocable trust outside of your estate, is a time-tested technique to recognize a favorite charity, maximize income tax benefits, generate a steady income stream for you from the charitable trust and replace the value of relinquished asset for your heirs with income-tax free life insurance: a win-win-win-win proposition.
Seek assistance from qualified legal and wealth management professionals to design the appropriate charitable giving plan for your family.
