USES OF CHARITABLE TRUSTS

Charitable Remainder Trusts:


  • Can be used to sell appreciated assets and avoid recognition of Capital Gain on lump sum upon sale leaving more principle to invest to produce income for the donor.
  • Often used by business owners upon sale of their business, or by real estate investors when their properties are liquidated.
  • Creates a supplemental tax favored “charitable retirement plan” option when traditional retirement plan contribution levels are reached by high income donors.
  • Provides donor with tax-favored retirement income for life.
  • Trust assets are not included in donor’s taxable estate at death.
  • Trust assets are not subject to claims of donor’s creditors in a lawsuit.


Charitable Lead Trusts:


  • Can be used to offset large taxable income after the sale of an appreciated asset.
  • Can be used to offset tax burden upon receipt of a large taxable payment in one year, e.g. Deferred Compensation Plan payouts.
  • Allows donor to transfer substantial assets to next generation during life without gift tax, or at death without estate tax.


THE CHALLENGE

Charitable Remainder Trusts and Charitable Lead Trusts are wonderful financial and estate planning tools (created Congress in the 1969 Tax Reform Act) that can help donors achieve their own personal financial and estate planning objectives for themselves and their families, while at the same time allowing them a way to Leave A Legacy to benefit their favorite nonprofit(s). 

Unfortunately, most nonprofits are ill-equipped to provide the financial, legal and technical guidance to help the donor properly implement these types of trusts in such a way as to efficiently fit into their overall financial and estate plan.  Furthermore, regulations limit how much nonprofits may assist the donor in those areas.  Many professional advisors also lack the knowledge, training, experience and sometimes motivation to assist the donors in using these intricate trust vehicles for accomplishing their charitable legacy objectives. 


SOLUTION

Our firm and its affiliates have created a Turnkey Solution to address these challenges.  


  • It involves using our experienced staff and affiliates that cumulatively have over 60 years of experience in charitable trust design and implementation.  We often work together in collaboration with the donors’ own professional advisors to accomplish this. 
  • We then partner with, Renaissance, Inc., a national charitable trust administration firm to administer the technical aspects of the trusts each year for the donors who can act as their own trustee.  
  • In cases where legal expertise is needed, our strategic alliance with legal professionals allows us to connect donors with qualified attorneys to help prepare the trust documents to meet their objectives. 
  • Our sister firm, Sherpa Investment Management, provides the investment management services for the trust using institutional investment management techniques specifically designed for charitable trusts, all on a fee basis with no commissions.

Turnkey Charitable Trust Solution Program

If you have a donor who might benefit from a Charitable Remainder or Charitable Lead Trust, please contact us for a proposal.