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Charitable Planning

Charitable giving can play a valuable role in your financial and tax strategies, because with a well-planned gift to charity you could be provided with an income tax deduction and reduction of estate taxes.  Your donation could also help you maintain financial security, exercise control over assets both during your lifetime and after death, while also providing for your heirs in the manner you choose.

In order to accomplish all these objectives, you will need a plan tailored to your individual circumstances.  We can provide you with strategies that can be used to create a giving plan that is both beneficial and appropriate for you. When planned properly, gifts of appreciated property to charity may allow you to avoid the capital gains tax you would have owed upon the sale of the asset and receive an income tax deduction, usually worth the fair market value of the property.  Also when you remove that asset from your estate, you may also reduce your potential estate tax burden.

If you wish to gift property to a charity but would also like to retain some control over the property, then a Charitable Remainder Trust (CRT).  A CRT is the most effective when funded by an appreciating asset, such as stock in family-owned business or real estate.  After transferring the property to the trust, no income tax is imposed on income remaining in the trust, and you may take a current income tax deduction based on the future value when it is transferred to the charity.When you remove the remaining value of the asset from your estate, you may also reduce your potential estate tax liability. 

If you wish to give to a charity without giving the asset away permanently, the you should consider a Charitable Lead Trust (CLT). With a CLT you essentially give the charity the use of an asset and the right to an income generated for a predetermined time.  After the specified time has lapsed, the asset can revert to you or be given to whomever you choose.  Appropriate assets might be income-producing stocks and bonds. You may receive a current income tax deduction for the value given to the charity, however, the trust pays income tax on its income.  If a CLT was created upon your death, then estate tax liability may be reduced.

Planning ahead can help make the most of your charitable giving opportunities and allow you to take advantage of additional benefits.

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