If you’re a retired person with a high net worth who is drafting an estate plan, you may be able to dodge some taxes while creating a lasting legacy in your name.
If that is something you would like to do with your estate, there are a number of charitable giving strategies you can employ. Learn more below.
Planning for generational gifting
During your lifetime, you can implement the structure of charitable gifts in your family name. Successive generations will use that framework to generate income, foster philanthropy and align charitable donations with your family’s values.
Here are some charitable giving options to explore:
- Charitable Remainder Trusts (CRTs) — If receiving an income stream is important, CRTs allow donors to contribute their appreciable assets to a trust. They can then draw on that income stream until they pass or for a predetermined number of years. Then, what remains is transferred to the designated charity.
- Charitable Lead Trusts (CLTs) — Alternatively, CRTs allow the charity to draw an income for a set time, and the family’s heirs eventually inherit what is left. This strategy is particularly effective when there’s a need to reduce gift and/or estate taxes.
- Forming a family foundation — You don’t have to be a Rockefeller descendant to create a private foundation with a charitable mission. Family members who share values can be involved in the trust administration if they choose or retain a professional to manage the trust.
All of these are viable strategies to reduce taxes and create an orderly format for charitable gifting in the family name.
Interested and want to know more? Your legal and financial advisers can help you choose the best vehicle for sharing your family’s wealth to build a legacy that endures.