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Getting Value Out of Giving with Charitable Trust

December 9, 2021 by Ronald "Chip" Morrison

Americans are givers. Recently, we gave more than $290 billion to our favorite causes, with the vast majority of charitable giving, $212 billion, donated by individuals or household donors.

Federal tax laws regarding cash gifts to individuals support this generosity and can have a big impact on your estate taxes. A taxpayer can give as much as $13,000 per year to separate individuals, gift and estate tax-free. If the taxpayer is married, the couple can make gifts of up to $26,000 to any individual.

One of the simplest forms of charitable gift giving is to give outright to 501(c)(3) organizations. As you probably know, even small cash or non-cash contributions can qualify for income tax deductions when they’re made to a qualifying 501(c)(3) organization. To get a tax deduction, simply get substantiating documentation from the charity and include it with your federal tax filing.

Giving small donations to charitable causes can earn you a tax deduction, but did you know that federal gift tax laws allow you to give substantial sums to Trusts, with the benefit of significant tax savings? Charitable Trusts can be flexible tools for making future gifts to charity and can also provide an income stream for you, your spouse, or loved one.

The Charitable Remainder Trust, or CRT, is one type of charitable Trust with positive tax consequences. With a CRT, the donor can arrange for charitable gifts by transferring assets into the Trust, with the Trust providing distributions to the donor during his or her lifetime. At the end of the CRT’s term, the Trust property is transferred to a named beneficiary in the Trust.

Yet another charitable Trust is the Charitable Lead Trust, or CLT. Through this type of Trust, a charitable concern gets distributions for a certain term, and when the term of the Trust ends, the remainder is transferred to a non-charitable beneficiary such as the donor’s children.

Some gift-giving strategies, like an outright donation to a 501(c)(3), are fairly straightforward. However, some are more complex, as is the case with a CRT or a CLT. This is why it’s important to consult with an attorney who has been trained in estate planning. He or she can help you create a gift-giving and tax-saving strategy that addresses your particular circumstance.

Mr. Ronald “Chip” Morrison, Jr. is a board-certified estate planning attorney with experience in both simple and complex estate matters. He is a member of the American Academy of Estate Planning Attorneys and has been engaged in Louisiana trusts and estate law for more than 16 years. He can prepare an estate plan for you that achieves your goals of passing your assets to whom you wish. The planning can even help minimize estate taxes. To learn more about how you can achieve your estate planning goals, please call our office in Metairie, Louisiana at (504) 831-2348 or contact us through our website.

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Ronald
Ronald "Chip" Morrison
Ronald “Chip” Morrison, Jr. is a Board Certified Estate Planning Law Specialist as certified by the Louisiana Board of Legal Specialization. He is admitted to practice before all State courts in Louisiana. He is also admitted to practice before the United States District Court for the Eastern and Middle District of Louisiana.
Ronald
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About Ronald "Chip" Morrison

Ronald “Chip” Morrison, Jr. is a Board Certified Estate Planning Law Specialist as certified by the Louisiana Board of Legal Specialization. He is admitted to practice before all State courts in Louisiana. He is also admitted to practice before the United States District Court for the Eastern and Middle District of Louisiana.

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