A man walks into a lobby and sits down next to a spiritual guru. The guru, wanting to make conversation asks, “So, what brings you here today?” The man replied, “ I want to do charity.” The guru responds with a smile, “Very good. The life of a man is not in seeing visions and in dreaming dreams, but in willing service. His true wealth is the good he does in the world to his fellows.” The man ponders these words for a few seconds. He then replies, “Yea, I’m here to see my lawyer. I just want the tax break.”
Charitable trusts are great vehicles for bringing out your philanthropic and altruistic side. Not only do charities attain well-needed funding, but also there are great tax advantages to the donor.
The most common type of charitable trust is the Charitable Remainder Trust. You basically transfer property you would like to donate into this trust. Usually, the charity is designated the trustee and manages or invests your assets in order to generate income. You get a percentage of the profits for the period of time that you specify in the trust.
You can even turn your appreciated property like stocks into cash without paying capital gains. You can reduce estate taxes and you can claim an income tax deduction. When you die, all your assets in the trust become the property of the charitable organization as well as any residual interest or profits that may have been generated.
Did you know that Bill and Melinda Gates set up a charitable trust with assets valuing over more than $30 billion? Making their mark on humanity, they are currently investing in cutting-edge research to diagnose tuberculosis in developing countries.
Creating a charitable trust is a win-win situation. You can benefit your favorite charity, do some good in the world, claim an income tax deduction, kiss capital gains good-bye and reduce estate taxes.
Simply put, this good deed certainly goes unpunished!
For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 or via email at email@example.com to schedule your free consultation.
It’s a Wild world. Are you protected?