Charitable Giving Optimization

There are many avenues for gifting to the causes and organizations you care about. We help you utilize tools and strategies that best fit your charitable inclination. Many of the institutions of art, sciences, religion, 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. Understanding the thresholds for tax deductions given for current contributions helps you get a benefit for the gifts you already plan to make simply by using the right tool.

Charitable gifts can reduce the size of your estate to help minimize estate taxes. Often, 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 also be able to benefit the charity while living 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.

Charitable Giving Tools

Donor Advised Fund:

your own private foundation, a donor advised fund allows you to give today in a way that may reduce your taxes, and then distribute those funds at your direction over a longer period. This can allow you to qualify for a deduction you might otherwise not reach the threshold for, while simultaneously maintaining your intended schedule of gifts.

Qualified Charitable Distributions:

IRA distributions are taxed as ordinary income and are included in your total income for the year, increasing your tax liability and potentially affecting eligibility for other benefits. Starting at age 70.5, a qualified charitable distribution is an extremely tax efficient way to give without impacting your income and also satisfies your RMDs once required.

Charitable Trusts:

• 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 owned by the charity. Remainder trusts, if properly structured, can qualify for a current tax deduction.
• Charitable Lead Trust: Also known as an Income 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.
• Charitable trusts are typically irrevocable and should be fully analyzed before they are utilized.

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