Planned Giving
If given the choice, how would you distribute
your wealth?
____ % to the IRS; _____ % to your Family; _____ % to Charities
If planning is done right, estate taxes can potentially be optional – clients then have a choice to become an anonymous taxpayer or a remembered philanthropist.
We encourage our clients to achieve their philanthropic objectives through outright and planned giving arrangements. Examples of several options available are:
Charitable lead trust – This is a trust under which a non-charitable beneficiary receives the remainder of the trust after payment of amounts over time to a charitable beneficiary. These trusts are often set up to pay the charity an annual annuity payment for the term of the trust.
Charitable remainder trust – This trust works in the reverse of the charitable lead trust. In a charitable reminder trust, a charitable beneficiary receives the remainder of the trust after payment of amounts over time, often in the form of annuity payments, to a non-charitable beneficiary.
Irrevocable Life Insurance Trust (“ILIT”): An ILIT is a trust that owns your life insurance policy (or policies). The ILIT pays the premiums on the policy, collects the death benefits when you die, and distributes the money according to the terms of the trust. And, since you don't own the insurance (the trust does, remember?); the proceeds are not included in your estate. The idea is to keep the money your heirs will receive from your insurance policy from being impacted by estate taxes. If you have an estate with assets that might exceed the then current maximum estate tax deduction, the proceeds from your policy could get taxed. By putting it in a trust, you keep Uncle Sam from getting a slice.
These are just a few of the many tools in our planned giving and tax planning arsenal. At Trilogy we consult with clients on all aspects of Wealth Management. Thoughtful and calculated use of a variety of tools provides an opportunity to greatly decrease the tax burden during a lifetime and at the time of death to help assure that your beneficiaries will receive the full benefit of the fruits of your labors.
Keep in mind these are complicated estate planning tools and are not suitable for all clients. Assets cannot be withdrawn once the trust is formed. The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional and you legal and tax advisors before implementing such strategies.