Alaskan Fall
Sharing The Harvest with Charitable Giving
October 31, 2011

Brown leaves decorate sidewalks. The morning air is crisp and cool. Pumpkin spice returns to the menu at Starbucks. These are unmistakable signs that fall is here; it is harvest time, the Giants' season has ended.  

The Giants Season is Over

Who Is A Candidate For Charitable Giving?
How Much Must I Give
Won't Charitable Gifts In My Estate Plan Short-Change My Beneficiaries?
What Are The Available Charitable Giving Tool?
15% Discount When You Keep This 2011 New Year's Resolution
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Harvesting Our Good Fortune 

As we "harvest" our good fortune, many of us become aware of how much we have. Then we think of charitable giving. Whether it is giving change to Salvation Army Bell Ringers, volunteering at a soup kitchen, or donating gifts to Toys-for-Tots, we as a society embrace the opportunity to make the holiday season special for all.


In the spirit of the season, we would like to take this opportunity to explore whether charitable giving should be part of your overall estate plan and discuss the various estate planning tools available to help your favorite charity and also yourself and your family.

Who Is A Candidate For Charitable Giving?

Alaska Bald eagle, Fall 2011 Anyone with charitable intentions and anyone facing significant taxes.


There is a common misconception that making charitable gifts in an estate plan is saved for the super wealthy. This could not be further from the truth. Though charitable giving is a tool used to reduce federal and state taxes, anyone who would like to support his or her favorite causes can add charitable gifts to an estate plan.


Charitable giving should also be considered by anyone facing significant estate, gift, or capital gains taxes. A person in this tax situation should be aware that the government will be his or her biggest charity if additional steps are not taken.  


By implementing charitable giving into one's overall estate plan, a person facing significant taxes can direct his or her possible tax dollars to a real charity instead.


How Much Must I Give
To Add Charitable Gifts To My Estate Plan?

Eagle sitting in a leafless tree There is no minimum (or for that matter maximum) on the amount you can leave as a charitable gift. It is our experience that most charities are delighted you thought of them when planning your estate no matter the size of the gift. You can leave as little or as much as makes you feel comfortable.


If you are using charitable gifts to reduce or eliminate taxes, the amount you will give to charity will be determined on a case by case basis.  


Think of the good your favorite charity or cause could do with even a thousand dollar gift. It could feed shelter animals for a month or provide clean drinking water to a village in a developing nation. A thousand dollars could buy an elementary school two computers or pay for a year's worth of text books for an underprivileged college student. Your place of worship could make repairs to its facility or a women's shelter could provide additional assistance to its residents with just a small gift.        

Won't Charitable Gifts In My Estate Plan
Short-Change My Beneficiaries?

Fall Fishing in Alaska It is common for even the most charitable individuals to forego adding charitable gifts out of guilt for not leaving every dollar to the beneficiaries of their Trust or Will.   But, will the beneficiaries really miss $1,000 or $10,000 out of the thousands or millions of dollars that they are likely to inherit?


No matter your answer, by adding charitable gifts to your estate plan you are demonstrating by example to the other beneficiaries the importance of being charitable. Still, there are various estate planning tools available to not only support your favorite charity but also benefit yourself and your family.

What Are The Available Charitable Giving
Estate Planning Tools?

Determining which charitable estate planning tool is best for you will be based upon your charitable intentions and financial situation. The following are the most typical charitable estate planning tools:


  1. Fall in Alaska 2011 Outright Bequests

    You can leave a gift to charity by naming it as a beneficiary in your Trust Agreement or Will. The amount of the gift can be a set dollar amount or a percentage of your remaining estate. Alternatively, you can leave a specific asset to your charity. Charities can also be named as the contingent beneficiaries of your estate in the event your intended beneficiaries, such as children and grandchildren, fail to survive you.    
  2. Charitable Remainder Trust.

    A Charitable Remainder Trust, or CRT, is a powerful estate planning tool that can provide multiple financial benefits not only to your favorite charities but also to you and your family. A CRT is best utilized when a person owns a highly appreciated asset, such as real estate or stocks, that provides little or no income. By putting such an asset into a CRT, that person will be able to defer capital gains taxes on the sale of the appreciated assets while receiving a new source of income, substantial current income tax charitable deductions and future estate tax deductions, if applicable.    
  3. Charitable Lead Trust.

    A Charitable Lead Trust, or CLT, provides similar financial benefits. The major difference, however, is the charity is the income beneficiary for a term of years and the remainder beneficiaries at the end of the term are the donor or members of his family. Here the charity is the lead-off beneficiary.

    An individual or couple transfers assets to the CLT. In return, the Trustee of the CLT pays a fixed percentage of the contribution annually to the chosen charities for a set term of years. At the end of the term (typically between 15 and 20 years), the remainder beneficiaries of the CLT receive the remaining CLT assets.

Bear Swimming in Alaskan river  

Giving part of your harvested wealth to charity is a way you can strengthen organizations and causes that matter to you.  Giving to charity also feels good!

When you want to discuss any issue raised in this newsletter, please give us a call.  We will be happy to discuss your charitible giving options confidentially.


Julia P. Wald
The Law Offices of Julia Wald
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Last year you promised yourself that in 2011 you would create a new estate plan. 

You resolved that your new documents would take into account new family members, new financial cirsumstances, new health realities, new charitable impulses, and the new tax laws.

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Call the Law Offices of Julia P. Wald at 415.482.7555 this week!


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