charitable planning presentation
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CHARITABLE PLANNING: TOOLS TO IMPLEMENT YOUR GENEROSITY
P. Haans Mulder, JD, MST, CFP®
Cunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) [email protected]
Holland Museum
Background• Partner at Cunningham Dalman, P.C.• Masters in Tax, CFP®, and specialize in
estates/elder law and business planning• Cunningham Dalman, P.C. has been serving
the greater Holland/Zeeland since 1900
Serving the Holland area since 1900
Overview• Background assumptions• Common client goals• Status on estate taxes• Vehicles for charitable planning
Serving the Holland area since 1900
Background Assumptions• You have an estate plan• You are charitably inclined• You need to plan for estate taxes (i.e.
high net worth)• Only have time to cover general
concepts
Serving the Holland area since 1900
Common Client Goals• Give money to charity and children• Create a stream of income • Get children involved in philanthropy• Avoid or minimize estate taxes• Minimize income taxes
Serving the Holland area since 1900
Status of Estate Tax Laws
?Serving the Holland area since 1900
Status of Estate Tax Laws• Plan for the worst, but hope for the
best…• Worst is exemption will be $1 million in
2011 and will stay at that level• Possible exemption will be $3-5 million
Serving the Holland area since 1900
Vehicles for Charitable Planning• Outright gifts• Split-interest gifts• Gifts tied to a charity or the community
foundation• Permanent structure for giving
Serving the Holland area since 1900
Outright Gifts• Variety of assets to use• Simple to do• Tax benefit for gifting appreciated
property• Be aware of charitable deduction
limitations
Serving the Holland area since 1900
Split-Interest Gifts • Gift is “split” between a charity and an
individual or individuals (which could include yourself)
• Charitable remainder trusts• Charitable lead trusts
Serving the Holland area since 1900
Charitable Remainder Trusts
• Charitable remainder annuity trust (CRAT)
• Charitable remainder unitrust (CRUT)• Pays an amount to an individual or
individuals for period of time and remainder to charity
Serving the Holland area since 1900
Split-Interest Gifts (CRAT)• An annuity is paid to an individual or
individuals for a term of years (20 at most) or life and remainder goes to charity
• Diversifying of investments and predictable income stream
• No transfer tax benefitServing the Holland area since 1900
Split-Interest Gifts (CRUT)• A certain percentage of the initial trust
assets is paid to an individual or individuals for a term of years (20 at most) or life and remainder goes to charity
• Helpful way to protect against inflation• Payments will vary
Serving the Holland area since 1900
Charitable Lead Trusts• Charitable lead annuity trust (CLAT)• Charitable lead unitrust (CLUT)• Benefit to charity for period of time
and remainder to an individual or individuals for terms of years (20 at most) or life
Serving the Holland area since 1900
Split-Interest Gifts (CLAT)• An annuity is paid to a charity and
remainder goes to individuals• Beneficial when interest rates are low
and already planning on making gifts• If investments don’t perform, there will
not be a distribution to remainder individuals
Serving the Holland area since 1900
Split-Interest Gifts (CLUT)• A certain percentage of the trust
assets is paid to a charity for a term of years and remainder goes to individuals
• Will always allow for a distribution to individuals
• Less tax benefitServing the Holland area since 1900
Gifts Tied to a Charity or the Community Foundation
• Charitable annuity• Donor advised fund• Supporting organization
Serving the Holland area since 1900
Supporting Organization• Establish a nonprofit organization and
“supports” an existing charity• Have control over gifts and less
complicated than private foundation• Not as much control as private
foundation
Serving the Holland area since 1900
Permanent Structure for Giving• Private Foundation • Donor forms a trust or a nonprofit
corporation and makes gifts to the foundation
• Foundation grants money to charities
Serving the Holland area since 1900
Private Foundation• Allows for greater control/flexibility
over gifts and involvement of children in philanthropy
• Very expensive to setup/administer and complicated rules to comply with
Serving the Holland area since 1900
Thank YouP. Haans Mulder, JD, MST, CFP®
Cunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) [email protected]
Serving the Holland area since 1900