Gifts in the form of cash, securities, real estate, life insurance, retirement plans, charitable gift annuities, charitable lead trusts
, charitable remainder trusts, or transfers from an existing private foundation can be invested with care to provide grants for the causes that matter most to you.
Business owners with charitable inclinations often seek to reduce or, in some cases, eliminate estate taxes by bequeathing business interests to private foundations or charitable lead trusts
. While such bequests can be effective for estate tax planning purposes, the rules for foundations and trusts make it difficult for a deceased owner's family to conduct business with those entities.
Charitable lead trusts
also may be used to accelerate charitable deductions for a client while creating a future benefit for a beneficiary.
With charitable lead trusts
, a portion of the trust income is donated to specified charities and then, after a certain period of time, the remainder of the trust is transferred to the beneficiaries, and any appreciation on the value of the assets is free of either gift or estate taxation.
For those individuals who are charitably inclined, charitable remainder trusts and charitable lead trusts
are excellent planning tools and should be considered.
(Charitable lead trusts
, which are not discussed in this article, reverse the transaction: The charity gets the income and the non-charitable beneficiary receives the remainder.)
(3,4) Split-interest trusts include three distinct types: charitable remainder trusts, charitable lead trusts
, and pooled income funds.
nongrantor charitable lead trusts
(CLTs); however, the new
Charitable trusts have been flat for some time but higher tax rates for income and capital gains on the wealthy might increase their attractiveness this year, said Barlow Mann, chief operating officer for The Sharpe Group, a consultancy in Memphis, Tenn., adding that Charitable Lead Trusts
have been the fastest growing type of charitable trusts.
A less generous exclusion amount will act as a brake on such lifetime gifting techniques as charitable remainder trusts and charitable lead trusts
There are also many estate planning techniques that can enhance this opportunity such as grantor retained annuity trusts, family limited partnerships, charitable lead trusts
, and sales to family trusts.