Estate Planning Vault

Charitable Giving Attracts Middle Class

Charitable giving, once reserved for the super-wealthy, is now becoming more mainstream. In addition to allowing people to support causes important to them, charitable giving can also provide supplemental income and tax breaks, an important component of a well-rounded estate planning.

Some methods of giving include the following:

• Pooled Income Fund. A pooled income fund “typically is a mutual fund established and maintained by an organization that collects contributions from many individuals.” Donations of this type qualify for certain tax breaks and donors and their beneficiaries receive distributions from income earned by the fund.
  
  
• Charitable Remainder Trust. A charitable remainder trust may take the form of a charitable remainder annuity trust (from which the donor usually receives an annual, fixed amount for a fixed term) or a charitable remainder unitrust (from which the donor commonly receives a fixed percentage for the term of the trust). With either type, tax deductions are applicable, and upon termination of the trust, assets are passed to named charitable beneficiaries. According to Certified Financial Planner Raymond Heidel with Five Rivers Advisors, these types of trusts “work well with highly appreciated property” because the tax deduction is linked to the fair market value of the asset contributed to the trust.

Source: www.CecilWhig.com, 11-22-06