Everyone has their own reason for gifting their assets or a portion of their income to charitable organizations.  Some find comfort in helping others who are less fortunate, while others simply want to share their good fortune.  Many of the institutions of art, sciences and education are supported in large part by those who want to give something back in appreciation for their contributions to the community or the individuals themselves. 

Presently, the tax code offers incentives for gifting of one’s assets or incomes. Tax deductions are given for current contributions and, for estate owners, charitable gifts can reduce the size of the estate to help minimize estate taxes.

Sometimes an individual will designate a charitable beneficiary in their will to benefit the organization after the individual dies.  By using charitable gifting techniques, a donor may be able to benefit the charity today without having to sacrifice the income that an asset can generate.  Understanding how properly structured charitable gifts can provide current benefits for both the donor and the charity could be important for the charitably inclined.

We work with you and your legal counsel as well as the charity you wish to help to structure a philanthropic plan that is consistent with your goals while taking advantage of provisions in the tax law. Techniques such as Donor Advised Funds, Charitable Gift Annuities, Private Foundations, Charitable Remainder Trusts and Charitable Lead Trusts are part of an array of tools that may be used. We also review the retirement cash flow implications of any transfer to ensure your lifestyle goals are considered. A brief description of two charitable vehicles follows:

Charitable Remainder Trust

A remainder trust enables the donor to transfer an asset while retaining the right to the income it generates. The asset becomes the “remainder” which is transferred to the charity after a term of years or upon the death of the donor or other income beneficiary.  Remainder trusts, if properly structured, can qualify for a current tax deduction.  The two basic types of remainder trusts are:

Unitrust: The income the donor receives is based on a percentage of the current fair market valuation of a trust asset. Each year, as the asset is valued, the income is adjusted based on the new valuation.

Annuity Trust: Instead of a percentage of the asset value, the donor is paid a fixed amount annually based upon the initial valuation of the trust.


Charitable Lead Trust

This vehicle transfers the income rights to the charitable organization. Generally, the income rights are assigned for a specified period of time after which the remainder passes to the donor or designated beneficiaries. 


Charitable planning involves  issues that should be discussed with a qualified legal or financial professional.

For more information about philanthropic planning, please contact us today.

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