Charitable Tax Planning
Charitable giving is a wonderful way to support causes that are meaningful to you. However, it is important to consider the tax implications of your donations. The tax attorneys at Carnahan Evans PC (‘Carnahan Evans”), can help you explore charitable tax planning, ensuring that as much of your donation as possible goes to its intended recipient instead of the government.
At Carnahan Evans, we offer our clients the opportunity to effectuate their charitable intent while achieving significant income and transfer tax savings. With our many years of experience in preparing Deed of Gift Instructions to charities as to how the gift is to be used, charitable remainder and charitable lead trusts as well as establishing private foundations, we are able to assist our individual clients with a variety of charitable endeavors. In addition, we assist our organizational clients with the formation of endowment funds and provide guidance with donor-related tax matters.
No one wants to sacrifice hard-earned savings to taxes. Through careful timing, unique legal tactics, and an expertly advised plan, you can achieve your goals for the bestowal of your estate. There are many strategies to consider regarding charitable tax planning, including all of the following:
- Charitable Remainder Trust: A charitable remainder trust (CRT) is an irrevocable trust with a current beneficiary (typically the grantor or the grantor’s beneficiaries) and a remainder beneficiary (a qualified charity). The current beneficiary will receive either a fixed amount or a percentage of the trust’s value each year for a specified period, and the irrevocable remainder interest will be bestowed upon the chosen charity.
- Charitable Lead Trust: A charitable lead trust (CLT) is essentially the inverse of a charitable remainder trust. The trust provides income payments to at least one qualifying charity for a specified period (a fixed term of years or the lifespan of an individual). After that period, the trust’s assets will be given to either the grantor or one or more non-charitable beneficiaries.
- Private Foundations: A private foundation, which can be set up by an individual, a family, or a group, is a legal entity that serves a good cause. Trustees or directors manage the foundation’s funds and programs, and the foundation generates income through the investment of its initial donation. Private foundations are also exempt from federal income tax under section 501(c)(3) of the Internal Revenue Service Code.
- Endowment Funds: An endowment fund is an investment fund often used by nonprofits, universities, hospitals, and churches. Regular withdrawals are made to support the institution’s ongoing operations (or other specified tasks), and all donations are tax deductible for donors.
If you would like to increase your tax savings when making charitable donations, consult Carnahan Evans to discuss charitable tax planning. An experienced tax attorney can help you explore these and other strategies for charitable giving. With our help, you can reduce or eliminate tax responsibilities, balance your desire to provide for your family and give to an important charity, and choose the best plan of action for your charitable goals. To get started, simply give us a call at 417-447-4400 or contact us online.