Charitable Contributions, Giving & Planning
Everyone has their own reason for gifting their assets or a portion of their income to charitable organizations.
Through Derek's affiliation with Eagle Strategies as an financial advisor, Eagle Strategies partners with Fidelity Charitable® to make available Charitable giving programs that allows you to combine the most favorable tax benefits with the flexibility to support your favorite charity at virtually any time.
Presently, the tax code offers incentives for gifting of your assets or income. Tax deductions are given for current contributions and, for estate owners, charitable gifts can reduce the size of the estate to help minimize estate taxes. The following are some ways you can structure charitable giving.
Charitable Remainder Trust
A remainder trust enables the donor to transfer an asset while retaining the right to the income it generates. The asset becomes the “remainder” which is owned by the charity. Remainder trusts, if properly structured, can qualify for a current tax deduction. There are three types of remainder trusts:
Unitrust: A unitrust the income the donor receives is based on a percentage of the current fair market valuation of a trust asset. Each year, as the asset is valued, the income is adjusted based on the new valuation.
Annuity Trust: Instead of a percentage of the asset value, the donor is paid a fixed amount annually.
Pooled Income Fund: Donors can pool their donated assets in a fund that is operated by the charitable organization. The donors then receive a proportionate share of income from the fund that is paid throughout their lifetime. Payments can vary each year based on the valuation of the underlying assets in the fund.
Charitable Lead Trust
Also known as an Income Trust this vehicle transfers the income rights to the charitable organization. Generally, the income rights are assigned for a specified period of time after which the remainder passes to the donor.
Charitable planning involves tax issues that should be discussed with a qualified tax^ or financial professional. Please let your adviser know if you are interesting in doing some charitable planning.
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