Long-Term Charitable Giving Strategies: Ensuring Your Legacy Lives On (Part 2)
As we continue our series on ensuring your legacy lives on, this blog dives deeper into long-term charitable giving strategies. If you haven’t already, be sure to check out our previous blog, “Ensuring Your Legacy Lives On,” for an overview of the importance of planned giving and how it fits into your estate plan.
Planned giving is a powerful tool that enables you to support causes you care about while also benefiting your estate. At the Law Offices of Mark F. Moss, we focus on integrating charitable giving into your comprehensive life plan, maximizing your impact and minimizing potential tax* liabilities. Here are some effective long-term charitable giving strategies to consider:
Donor-Advised Fund (DAF)
A Donor-Advised Fund (DAF) is a flexible and straightforward way to make charitable contributions. You can deposit assets such as cash, securities, or restricted stock into the fund, managed by a third-party organization. This setup allows you to take immediate tax deductions, while the assets grow tax-free and can be distributed to charities over time.
Benefits:
- Immediate tax deductions
- Tax-free growth of contributions
- Flexibility in choosing when and how much to donate
- To establish a DAF, consult your local community foundation or financial advisor.
Charitable Remainder Trust (CRT)
A Charitable Remainder Trust (CRT) lets you donate assets to a trust while receiving income during your lifetime. The remaining assets go to your designated charities after your death. This approach provides several benefits, including:
Benefits:
- Immediate tax deductions
- Deferral and avoidance of capital gains taxes
- A stream of income for you or your beneficiaries
Work with your wealth manager and estate planning attorney to set up and manage a CRT. It’s essential to inform the beneficiary organization about your intentions to ensure they are aware and can keep you informed of their work.
Pooled Income Fund
A pooled income fund operates similarly to a mutual fund but holds donations instead of investments. Contributions are pooled and invested, providing you with an income stream based on the fund’s performance. Upon your death, the remaining assets go to the designated charities.
Benefits:
- Immediate partial tax deduction
- Income distributions during your lifetime
- The fund supports charitable causes after your death
- Acceptable contributions include cash, stocks, mutual funds, and other liquid assets. Consult with an estate planning attorney to understand the full tax implications and benefits.
Charitable Lead Trust (CLT)
A Charitable Lead Trust (CLT) allows you to donate income from certain assets to charities for a set period. After this period, the remaining assets return to you or your beneficiaries. This strategy helps reduce estate taxes while supporting charitable organizations.
Benefits:
- Reduces estate taxes
- Provides immediate support to charities
- Remaining assets transfer to heirs after the trust term ends
- A CLT can be tailored to your financial and philanthropic goals, and an estate planning attorney can help you establish one that meets your needs.
Incorporating long-term charitable giving strategies into your life plan not only benefits the cause(s) you care about, but also provides significant tax advantages and income opportunities for you and your family. Whether you choose a Donor-Advised Fund, Charitable Remainder Trust, Pooled Income Fund, or a Charitable Lead Trust, the right strategy can help you leave a lasting legacy.
Contact the Law Offices of Mark F. Moss at (904) 329-7242 or visit markmosslaw.com to schedule a complimentary consultation. Let’s discuss how you can make a meaningful impact through strategic charitable giving.
*Disclaimer: Reading this blog post does not create an attorney-client relationship and is not legal or tax advice. This is for informational purposes only. It is best to speak with an attorney or tax professional about your specific situation, questions, assets, concerns, and needs.