Gift Planning


Welcome to your resource for charitable gift planning!

Are you interested in planned gifting or estate gifting? Below are some options to consider.

Make a split-interest gift.

If you wish to donate assets to a charity but retain some of the benefits of holding those assets, a gift of split interest might be a good option. With split-interest gifts, the donor opens and funds a trust in the charity's name and receives a charitable income tax deduction at the time of the transfer. Opening a trust allows the donor to retain some rights to the property and also reduces the value of his or her taxable estate. In addition, the donor may be able to avoid capital gains on the assets transferred to the trust.

Some ways to provide split-interest gifts include:

    Charitable remainder trust (CRT):

A CRT provides either a fixed payment or a fixed percentage to the donor (or other beneficiary) every year. In either case, the amount must be at least 5% but no more than 50% of the property's fair market value. The trust is irrevocable and must make payouts at least annually. The term can be for the life of the donor or for a set number of years. At the end of the term, the remainder goes to the designated charity. If your primary goal in setting up a CRT is to maximize the payments during your lifetime, consider whether the trust assets have the potential to appreciate. If they do, you're better off receiving a percentage of the trust's value every year. If you believe the assets will decline in value, you're better off receiving a fixed payment.

    Charitable lead trust (CLT):

A CLT is the reverse of a CRT. It provides income to a charity for a set number of years, after which the remainder passes to the donor's heirs. It can be a good choice if you don't need lifetime income from a particular asset. The trust is often structured to get an income tax deduction equal to the fair market value of the property transferred, with the remaining interest valued at zero to eliminate a taxable gift. Like a CRT, a CLT is irrevocable.

    Pooled income fund (PIF):

A PIF is a trust maintained by a public charity. Individual donors contribute to the fund, which works like a CRT with the charity acting as the administrator. As with a CRT, the donor receives income during his or her lifetime. After the donor passes away, control of the funds goes to the charity

Contributions to a PIF qualify for charitable income, gift and estate tax deductions. A PIF doesn't require the legal expense of creating an individual trust.

Donate tax-deferred assets held in retirement accounts.

Donating a retirement account tax-effective way to support a charity. To do so requires assigning the charity as the beneficiary on your account. Because the charity is exempt from both income and estate taxes, it can receive 100% of the account's value.

    Make a testamentary gift through your Will.

The simplest way to include a charitable contribution in your estate is through your will. The amount you give will not reduce your income taxes, but it could reduce your taxable estate, potentially increasing the amount you'll be able to leave to your heirs.

The above content is general in scope and should not be relied upon or interpreted as advice. In matters of charitable gifting, it is important to seek the guidance of your financial advisor, tax planner, and/or estate planning attorney.