For many people, charitable planning is an important part of planning their estates, for reasons of both moral responsibility and practical financial management. Making a substantial donation to a charity with personal significance to you can be a source of great personal satisfaction and a lasting piece of your legacy. Beyond simply writing checks, donating property, naming your preferred charity as a beneficiary of your retirement fund or insurance policy, there are many other ways to organize your assets and make provisions for charitable giving.
At the Law Office of Carey Thompson, PC, we assist our clients in making meaningful donations in the present and/or for the future. We are proud to provide clients with individualized guidance to meet the particular charitable planning goals of each. Our in-depth understanding of the law, taxation, and estate planning in general has helped a great many individuals and families throughout Fort Worth and Tarrant County plan their financial futures. The Law Office of Carey Thompson is dedicated to providing intelligent, cost-effective solutions to everyone we serve.
Charitable Planning: Lead Trusts
These trusts ensure that your appreciating assets provide immediate assistance to the charity of your choice through recurrings payments over a fixed period of time. When this period of time ends, your loved ones will receive the remaining balance. Charitable lead trusts have the advantage of fulfilling your philanthropic desires with tax benefits to your family since the remaining assets will come to them with reduced or non-existent estate and gift taxes.
Charitable lead trusts are irrevocable, as are charitable remainder trusts.
Charitable Planning: Remainder Trusts
Charitable remainder trusts are the inverse of charitable lead trusts in that you put assets into a trust which pays your beneficiary for a stated period of time first. After the pre-established period of time passes, the remaining assets are transferred to the charity or charities of your choice.
Charitable remainder trusts permit you to avoid immediate payment of capital gains taxes on the sale of any property or stock while also providing you with a current income tax deduction.
Charitable Gift Annuities
You create a charitable gift annuity by giving a substantial gift to the charity of your choice. During your lifetime, the annuity pays you a fixed percentage of its worth annually. When you die, the remaining value of the annuity is paid to the charity. A charitable gift annuity provides you with an income stream and several tax benefits while you are alive, including a federal income tax charitable deduction when you itemize, as well as the deep pleasure of knowing your assets will benefit others when you pass away.
If you are under the age of 55 or can forego receiving immediate payments, Carey Thompson can set you up with a deferred gift annuity. This will enable you to delay your receipt of payments until a time when they will be more helpful, such as when you retire.
If you wish to give ongoing funds to a charity, you may want us to assist you in creating a family foundation. Once the foundation exists, it can not only receive donations throughout your lifetime to benefit continuing charitable work, but go on receiving donations after you die. Thus, a family foundation may sustain a charitable cause for generations.
Once a family foundation is established, an endowment fund, which makes regular withdrawals from invested capital, may be created. Such a fund is typically used to support the particular goal of a university, religious institution, hospital, or nonprofit. Like family foundations themselves, endowment funds are supported by donations.
Life Estate Deeds
Life estate deeds are extremely useful if you want to leave real estate to a charity but continue to live on that property for the rest of your life. Such deeds enable you to transfer the property to the charity in the present while retaining what is known as “a life estate,” which allows you to own and make use of the property until your death. In other words, you will be a “life tenant,” until you die, at which time the property will be transferred to the charity in its entirety.
Benefits of Charitable Planning
Planning your charitable giving is beneficial, financially as well as in terms of personal satisfaction. Planned gifts may provide you with the opportunity to:
- Decrease tax liabilities for your beneficiaries
- Lower your income taxes through charitable deductions
- Avoid capital gains taxes on assets that have appreciated
- Provide an estate tax deduction
- Provide income for you or someone you designate
- Benefit individuals, communities, and causes you value
- Create a charitable legacy you and your family can be proud of
Charitable planning, like all planning for the future of yourself and your family, is time well-spent.
If you are fortunate to have a substantial estate, and generous enough to want to bestow part of your bounty on causes close to your heart, the Law Office of Carey Thompson is well-equipped to assist you. From this content you can see how various and complex charitable planning is. This is why it is essential to have a skilled charitable planning attorney help you choose the best way to distribute your assets, both during your lifetime and after your death. Contact us by phone, email, or through our website. We are eager to help.