Charitable Planning Trusts

KENTUCKY CHARITABLE PLANNING ATTORNEYS
If you have contributed to a charity or plan to do so, you certainly want to ensure your contribution is going to the charity of your choice and that you are benefiting from favorable tax consequences in doing so. There are a variety of ways to place your money in a reputable charity of your choice. You should consult with a charitable planning attorney to discuss what option is best for your particular financial situation and goals.

DIFFERENT WAYS TO CONTRIBUTE TO A CHARITY
The methods described below are common ways to contribute to a charity while benefiting from the best tax consequences of your kind contribution. The below methods are not the only ways to contribute to charities, so you should consult with the attorneys of Goeing Goeing & McQuinn for further information on other options that may be available to you.

Charitable Lead Trust: This type of trust reduces a donor’s taxable income by donating a portion of a trust’s income to a particular charity, and the remainder that is not donated is transferred to the donor’s beneficiaries. This trust is a good way to share your income with a charity of your choice, reduce taxable income, and still leave assets for your beneficiaries.
Charitable Remainder Trust: This type of trust reduces taxable income by first distributing income to beneficiaries and then donating the remainder of the income to a charity of the donor’s choosing. This trust is similar to a Charitable Lead Trust except for the fact that a charity receives income after beneficiaries do, as opposed to first.
Forming a Charitable Organization: If you are motivated to start your own charity, you can benefit from favorable tax consequences and receive a significant tax deduction from your personal income. Further, you may be able to avoid other negative tax consequences, such as taxation of capital gains on assets that appreciate significantly.
Charitable Gift Annuities: This is a transaction whereby a donor contributes a gift to a charity by transferring assets, and in exchange, the donor receives a tax benefit and a lifetime annuity. Annuity payments cease when the beneficiary of the annuity passes away. At this time, the charity will retain any remaining funds. A charitable gift annuity benefits a charity while at the same time benefiting the donor with an income tax deduction as well as providing a beneficiary with lifetime installments of income.
Charitable Gift Life Insurance: This is a method of contributing to a charity of your choice by having a life insurance policy where the charity is the beneficiary. This method of charitable giving is easier for many people, as life insurance payments over time are more practical for than giving a large lump sum to a charity on one occasion.
Endowment Funds: This method of charitable contribution is set up by institutions with significant capital. Capital is invested and then there are consistent withdrawals of this capital to a charity of the institution’s choice. Endowment funds receive money by donations, and such donations are tax deductible. An endowment fund must be adequately managed and have particular policies to ensure a continued charitable purpose. Such policies include an investment policy, withdrawal policy and a fund usage policy.
Donor Advised Funds: These are private funds that are administered by third parties who manage a donor’s charitable donations on behalf of a family member, another individual, and even an organization. These types of funds are becoming a popular way to donate to a charity of your choosing. This method allows the donor to easily donate to the fund and allow another party or entity to have the responsibility of managing the fund, taking the pressure off of you.
Leaving a Portion of Your Estate to a Charity: You can contribute a portion of your estate to a charity of your choice by inserting language to this effect in your last will and testament, in a living trust, or in a testamentary trust. You would need to specifically indicate that you want a portion of your estate to go directly to a charity, just as you would specifically indicate that a portion of your estate is to be distributed to family members or other beneficiaries.

KEY GOALS OF CHARITABLE PLANNING
As discussed in each of the methods above, the purpose of charitable planning is to ensure that your desires to help out a charity are met, while at the same time allowing you to benefit from a transaction to a charity in terms of favorable tax treatment. Because the IRS allows for charitable deductions to your income tax, you should take advantage of an opportunity to help others and yourself at the same time.

Charitable planning should go hand in hand with estate planning. As you plan for your future by way of setting up trusts or ensuring that your estate will be well-managed after your passing, you should incorporate any charitable goals into your estate plan. It is better to plan all aspects of your estate now, rather than later on, in order to take full advantage of the favorable tax consequences.

By seeking the advice and trust of an experienced charitable planning attorney, you can be rest assured that your hard-earned money will be going where you want it to go. Our attorneys can help you choose a charity to ensure the charity is reputable and you can track where your money is going.

CONTACT OUR OFFICE TODAY FOR A FREE CONSULTATION
If you are considering contributing to a charity and would like information on the best way to satisfy your goals, and at the same time benefit from tax consequences, contact the attorneys of Goeing Goeing & McQuinn today to schedule your free consultation. Our highly skilled estate and charitable planning attorneys will help you choose the best way to contribute to a charity that fits with your financial situation. To schedule your free consultation with one of our attorneys, call our office at (859) 904-2045.