Charitable Planning Creating Smart Plans for the Future

Madison Charitable Planning Attorney

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At Krause Estate Planning & Elder Law Center, our compassionate legal team knows that many of our clients support various charitable causes that are important to them and their families. That is why we are committed to using our legal resources and knowledge of the law to help clients donate money to charities they are passionate about. While charitable gifting can be rewarding, it can also be used to generate large income, estate, or gift tax deductions.

Although there is a wide variety of legal strategies that can be used to maximize these saving opportunities, optimal results can only be achieved with careful planning and analysis. If you plan to make significant charitable contributions, then you need to reach out to our legal team to disucss how charitable gifting can impact your personal and family wealth planning.

Charitable Lead Trust

Charitable lead trusts are used to make payments to charities for a specific period after which the assets that remain in the trust pass to a non-charitable beneficiary. Generally, the lead interest (the portion of funds paid out to the charity) will qualify for a charitable tax deduction if thetrust is a living trust. In addition to a significant tax deduction, a charitable lead trust also gives control over the distribution of inheritance to grandchildren or other loved ones rather than to wealthy children, which also reduces their taxable estate.

Charitable Remainder Trusts

Setting up a charitable remainder trust provides tax benefits to you during your lifetime. When you establish a charitable remainder trust, you commit to the assets that remain in the Trust after your death or after a specified number of years will go to one or more charities. Until that time though, you can receive annual distributions from the trust assets. There is also an annual tax deduction you can take advantage of, despite receiving the distributions. This is because your commitment to the trust balance will go to charity.

Private Foundation

A private foundation offers clients considerable freedom to control the amounts they gift by placing restrictions on how the funds are used by charities. Private foundations are nonprofit organizations that manage their own funds or endowments. At least 5% of the foundation’s net assets must be paid out each year by trustees or directors. While managing a private foundation can be challenging and expensive, it can be more flexible than other charitable gifting options.

Charitable Donor-Advised Funds

A charitable donor-advised fund can be a cheaper alternative to a private foundation. This charitable gifting strategy allows you to recommend distributions from this account to support public charities of your choice. The fund also gives you the option to appoint advisors and to name successors to carry on your charitable giving in the future.

To learn more about which charitable planning strategies are right for you, please give us a call today at (608) 344-5491 to request a case consultation.

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