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Charitable Giving In Estate Planning

At Carolina Estate Planning, we understand the importance of providing support to non-profit organizations and commend individuals that seek to support them through charitable giving. In order to minimize tax implications and maximize the amount of funds the charity receives as well as the amount of money the donor and their family can retain, it is imperative that you seek counsel from an attorney experienced in charitable giving through estate planning. 

Benefits of Charitable Giving

There are considerable benefits to utilizing charitable gift planning as a part of your estate plan. These advantages include:

  • A feeling of satisfaction knowing you are supporting a cause that has meaning to you
  • Immediate and deferred tax benefits
  • Ability to provide for your heirs while reducing their tax obligation
  • Capital gains avoidance
  • Creation of a family legacy

Types of Charitable Giving

There are many different ways to take advantage of charitable giving in your estate plan. Some of the more popular options include:

Charitable Lead Trusts

A Charitable Lead Trust pays income to a charity either for a set amount of time or until the death of the donor. At that time, the remaining principal in the trust will go to the donor or the donor’s specified beneficiaries. Explained below are two types of Charitable Lead Trusts.

  • Charitable Lead Unitrust (CLUT): A CLUT pays a fixed percentage of the value of the trust assets. Annual valuations are required and future trust contributions are allowed.
  • Charitable Lead Annuity Trust (CLAT): A CLAT pays a fixed payment amount every year to the designated charity or charities. Assets are only valued at the time the trust is created and future contributions are not allowed.

Charitable Remainder Trusts

A Charitable Remainder Trust allows the trust donor or other designated party to receive payments from the trust for a specific remainder of time while supporting a charity. There are significant income tax and estate tax deductions available with Charitable Remainder Trusts. Attorneys, accountants, and banks are popular trustee choices with these types of trusts. Charitable Remainder Trusts are irrevocable, meaning that once they are created they cannot be revoked nor their terms amended.

  • Charitable Remainder Unitrust (CRUT): A CRUT pays a fixed percentage of the value of its holdings annually to its beneficiary, which can be the donor. There are different variations of the CRUT that can be used depending upon the specific circumstances of the gift.
  • Charitable Remainder Annuity Trust (CRAT): A CRAT pays a fixed dollar amount annually to its beneficiary, which can be the donor.

 Let Jeff Help with Your Charitable Gift Planning Goals

I am Attorney Jeff Bloomfield and I encourage you to contact me to learn more about how charitable gift planning can be utilized not only to support the charity of your choice, but also to maximize tax implications for you and your family. You may reach me at 336-790-5107 or via my contact page. Together we will create a charitable gift plan that you can feel good about.

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