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Charitable gifts are an important part of estate planning for many individuals. Most people would rather give money to a charitable organization than to the government in the form of estate taxes.
Gifts to charitable organizations receive an absolute deduction from the estate tax. That is, if your estate has $10 million in taxable assets, and you give $5 million to charitable organizations upon your death, that amount will not figure into your taxable assets.
CHARITABLE REMAINDER TRUSTS
Rather than using a bequest in a will to make a charitable gift, consider creating a charitable remainder trust. With a charitable remainder trust, you (and possibly your spouse) fund the trust and serve as the income beneficiaries of the trust through your lifetime. After death, the trust is dissolved and the principal is distributed to charitable organizations you specify.
Charitable trusts can be an excellent addition to a traditional retirement plan, because you receive an automatic annual income payment while still protecting the principal of the trust for distribution — tax-free — upon your death. Charitable remainder trusts have other tax benefits, including protection from capital gains tax and current income tax deductions.
CHARITABLE LEAD TRUSTS
Charitable lead trusts are often seen as the opposite of a charitable remainder trust. With a charitable lead trust, annual income payments are made to the designated charity, and after your death the principal — including any growth — is transferred to your heirs.
Like a charitable remainder trust, a charitable lead trust has several tax advantages both for you and your heirs.
CHARITABLE TRUSTS SHOULD BE PART OF A COMPREHENSIVE ESTATE PLAN
Charitable trusts are complex legal structures that should be created as part of an overall estate plan, and only upon the advice of knowledgeable estate planning attorneys.
At The Law Offices of Kennedy & Jackson, in Houston, Texas, our estate planning lawyers have decades of experience advising a families at all different asset levels regarding estate planning, charitable giving and the after-death tax consequences of financial decisions made during one’s lifetime. Our attorneys — both of whom are board-certified in estate planning and probate law by the Texas Board of Legal Specialization — are highly qualified to provide advice and representation on all types of estate planning matters.
CONTACT THE LAW OFFICES OF KENNEDY & JACKSON
Our law office is located in the Galleria area of Houston, with free on-site parking available next to our office building. We provide a complimentary — and confidential — initial consultation to all new potential clients.
To schedule an appointment with one of our lawyers, call 713-783-7444 or send us an email.