Person writing a check to a charitable organization

During estate planning sessions, many people express their desire to give money or assets to charitable organizations. Berkley Oliver PLLC helps its clients accomplish their charitable giving goals in ways that protect their assets from tax liabilities and other financial burdens. 

Giving is an honorable thing to do, but it can cost more than necessary if it is not handled correctly. 

If you have charitable planning matters to attend to, contact Berkley Oliver PLLC to discuss your case. We provide tailored, effective guidance in all subjects related to estate planning, including charitable planning. Call our office today to learn how we can assist you. 

Goals of Charitable Planning

Estate planning attorneys engaged in charitable planning services seek to accomplish many goals for their clients. Two, however, are among the most important: fulfill your desires to help a charitable organization and obtain for you the most favorable tax treatment in the process. 

To accomplish these goals, estate planning attorneys may use various legal tools and avenues, including:

Charitable Planning Options

Each of the legal tools and avenues an estate planning may use for charitable planning can be divided into differing types, and each has its own advantages. 

Charitable Lead Trust

A charitable lead trust allows you to set up a series of payments to a charity paid out over a specific period. Once the time period has passed, the rest of the money goes to your non-charitable beneficiaries or other destinations. 

This type of trust shields the charity from tax liability and preserves the “inherited” money now held in an irrevocable trust. Because the funds are in a trust, they are not considered to be the property of the grantor of the trust. 

Charitable lead trusts are irrevocable, meaning they cannot be altered by the grantor. Once the grantor establishes the trust, they lose control over the funds within. 

Charitable Remainder Trust

This type of trust begins with the creation of an irrevocable trust that has one or more non-charitable beneficiaries. These beneficiaries will receive regular payments from the trust for a window of time not to exceed 20 years. 

After the designated time has passed, the remainder of the funds in the trust will be given to a charitable organization without tax liability. Charitable remainder trusts, like charitable lead trusts, are irrevocable. They should be used only with the guidance of an experienced estate planning attorney. 

Gift Annuities

A gift annuity is a tool that allows donors to donate to charities while alive and receive income from their donations for the rest of their lives. It also allows donors to receive tax benefits for doing so. Once the donor passes away, the remainder of the asset becomes the sole property of the charitable organization. 

Charitable Life Insurance Gift

One of the simplest ways to give to a charity is through life insurance. A donor can simply pick the charity of their choosing to be the beneficiary of the insurance policy. Upon the donor’s death, the charity receives the insurance payout. 

Private Foundation

Your estate can benefit greatly by establishing a foundation for charitable giving. Assets used to fund the foundation are effectively removed from your estate and become no longer subject to various tax liabilities. Additionally, appreciated assets will not be subject to capital gains tax.

The only major requirement for using a foundation for charitable giving is that you must actually give. The law requires that a small portion of the foundation’s assets be distributed to at least one charitable organization each year. 

Will Beneficiary

You can also decide to make a charity a beneficiary in your will — this will give you the power to directly give the charity the assets you wish. You simply need to express language gifting the asset to the charity. 

Forming a Charitable Organization

Another option to consider in charitable planning is forming your own charitable organization. If your desire to help others is great, you may find it beneficial to start your own charitable group, which will lead to direct tax benefits and permit charitable donations to your cause. 

One of the main benefits of choosing this course is that the capital gains taxes due at the time of the sale of many assets would not apply if you formed a charitable organization. Valuable assets could be sold to benefit the charity without incurring substantial capital gains taxes. 

Donor-Advised Funds

Donor-advised funds are investment accounts that solely benefit charitable organizations. Donors can donate using cash, securities, and appreciated assets while avoiding many of the tax implications typically associated with the transfer of these assets. 

Contact Berkley Oliver PLLC for Charitable Planning Services in Shelbyville, Kentucky

Get the guidance and representation you need and the peace of mind you deserve. Berkley Oliver PLLC can help you through the decisions and legal dimensions related to your charitable planning matters. Contact us for a consultation today.