Charitable Gifting in Your Estate Plan www.yourestatematters.com

Charitable Gifting in Your Estate Plan

CHARITABLE GIFTING IN YOUR

ESTATE PLAN

Charitable Gifting in Your Estate Plan www.yourestatematters.com

For many people, philanthropy is a way

of life. If you are one of those people,

you likely donate to a number of

charities on a regular basis. You may

even be personally involved in some of

the charities or non-profit organizations

that matter to you. If philanthropy is

important to you while you are alive,

why not include charitable gifting in your estate plan as well? Not only does the

inclusion of charitable gifting in your estate plan serve to extend your philanthropic

endeavors but it can also provide a significant tax advantage to your overall estate plan

as well. Because of the numerous ways in which charitable gifting can be included in

your estate plan it is always best to consult with your Missouri estate planning attorney

before settling on a method; however, a basic understanding of some of the more

popular ways in which philanthropy can be included in your estate plan is a good place

to start.

A Word about Taxes

One important consideration in any comprehensive estate plan is the impact taxes will

have on the plan. Specifically, gift and estate taxes and/or capital gains taxes.Most

charitable gifting has the added benefit of reducing the impact of these taxes on your

estate plan. To understand why this is important, you need to understand how taxes can

wreak havoc with your estate without proper tax avoidance planning.

Charitable Gifting in Your Estate Plan www.yourestatematters.com

Federal gift and estate taxes -- are potentially levied on your estate when you

die. Each taxpayer is entitled to a lifetime exclusion before the tax applies. Thanks

to the American Taxpayer Relief Act of 2013, the lifetime exclusion amount was

set at $5 million, adjusted annually for inflation. For 2014, the amount is $5.34

million, meaning you can gift up to that amount during your lifetime and/or at

death before gift and estate taxes

apply. When you die, the value of

your estate assets plus all gifts

made during your lifetime will be

calculated. If the total exceeds the

lifetime exclusion limit the

amount in excess of the limit will

be taxed at the rate of 40 percent.

Capital gains taxes -- may also impact your estate plan. Though it will not directly

impact your estate, your estate beneficiaries can be affected if they are required

to pay capital gains tax on a gift upon the sale of the assets down the road. If your

basis in the asset is used, the gain realized may be substantial and will be taxed at

up to a 15 percent tax rate.

Annual gift tax exemption -- offers taxpayers the ability to gift up to $14,000 per

year to as many beneficiaries as they wish, including charitable beneficiaries, tax-

free. Therefore, you may be able to contribute up to $14,000 to whichever

charitable gifting option you choose without incurring a tax obligation and

without the gift counting toward your lifetime exemption limit for gift and estate

taxes.

Charitable Gifting in Your Estate Plan www.yourestatematters.com

The good news is that charitable gifting in your estate plan can offer an immediate tax

benefit as well as reduce the overall tax burden on your estate when you die.

Charitable Trusts

Using a trust to make gifts to charity is a popular option in part because of the flexibility

trusts offer. Two popular options are the charitable lead trust, or CLT, and the charitable

remainder trust, or CRT. Both options combine charitable and non-charitable gifting. A

CLT trust provides income to a charitable beneficiary for a set period of time after which

the remaining assets in the trust are distributed to a non-charitable beneficiary. A CRT

works the opposite way. The trust pays out first to a non-charitable beneficiary for a

specific period of time with the remainder of the trust assets earmarked for the

charitable beneficiary. A CRT is useful for buying and selling assets without immediate

Charitable Gifting in Your Estate Plan www.yourestatematters.com

capital gains tax because the CRT is exempt from income tax. In addition, if you create

an inter vivos, or living, trust you may also be entitled to an income tax deduction,

adding to the tax benefits available when using a CRT.

Charitable Gift Annuities

A charitable gift annuity is similar in concept to a charitable remainder trust but no trust

agreement is involved. With a charitable gift annuity, or CGA, you contribute cash or

other property acceptable to the charity in exchange for fixed annuity payments to one

or two designated individual beneficiaries, guaranteed by the charitable organization. As

with a CRT or CLT, there are a number of tax benefits that may apply to a CGA, including

an income tax deduction in the year the gift to the CGA is made.

Charitable Donor Advised Funds

With this option you make an irrevocable tax-

deductible contribution to a professionally

managed fund. You then have the ability to

make recommendations for grants to qualified

non-profit organizations. Similar in nature to

creating your own private foundation, the difference is that once you make a

contribution to a donor advised fund the fund then owns the assets. Therefore, you are

only able to make recommendations. The fund ultimately controls the distribution of

assets. Like other charitable gifting options, contributions to a charitable donor advised

fund are typically tax deductible up to limits imposed by the Internal Revenue Service.

Charitable Gifting in Your Estate Plan www.yourestatematters.com

There are, of course, numerous other ways in which you can include charitable gifting in

your estate plan. Consult with your Missouri estate planning attorney to decide which

option is best for your estate plan.

Fidelity, Charity

Planned Giving Design Center, Charitable Remainder Trust

T. Rowe Price, Giving to Charity

Charitable Gifting in Your Estate Plan www.yourestatematters.com

Estate Planning and Elder Law Attorneys in St. Louis, MO St. Louis Estate Planning Attorneys: Planning for Your Future Today

Missouri Estate Planning attorneys Amen, Gantner&Capriano, Your Estate

Matters, L.L.C. are here to help you with legal issues regarding St. Louis Elder

Law, Veterans Aid and Assistance, Probate, Wills, Trusts, Trust Administration,

Powers of Attorney, Health Care Directives, LGBT, and all things required to

establish a proper estate plan for the future of both you and your loved ones.

Our law firm understands the varying dynamics of modern families and seeks to

address these issues in the estate plan so your estate is distributed only to those

who you request, instead of those who may be otherwise legally obliged to it.

Estate planning can be a big project that requires consistent maintenance;

however, our professional Estate Planning attorneys can organize all of the legal

paperwork and logistics for you, while offering helpful legal advice along the

way.

Amen, Gantner&Capriano, Your Estate Matters, L.L.C. 10805 Sunset Office Dr., Suite #100

St. Louis, MO 63127 Phone: (314) 966-8077

www.YourEstateMatters.com

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Estate Planning and Elder Law Attorneys in St. Louis, MO St. Louis Estate Planning Attorneys: Planning for Your Future Today

Missouri Estate Planning attorneys Amen, Gantner&Capriano, Your Estate Matters, L.L.C. are

here to help you with legal issues regarding St. Louis Elder Law, Veterans Aid and Assistance,

Probate, Wills, Trusts, Trust Administration, Powers of Attorney, Health Care Directives, LGBT,

and all things required to establish a proper estate plan for the future of both you and your loved

ones. Our law firm understands the varying dynamics of modern families and seeks to address

these issues in the estate plan so your estate is distributed only to those who you request, instead

of those who may be otherwise legally obliged to it. Estate planning can be a big project that

requires consistent maintenance; however, our professional Estate Planning attorneys can

organize all of the legal paperwork and logistics for you, while offering helpful legal advice along

the way.

Amen, Gantner&Capriano, Your Estate Matters, L.L.C. 10805 Sunset Office Dr., Suite #100

St. Louis, MO 63127 Phone: (314) 966-8077

www.YourEstateMatters.com