WAYS OF GIVING...
by John Jordan,
CFP
With the
legislative changes, the structure of charitable giving can be just as
important as the amount that is given, both to the charity and to the
client. The options to the client are much broader
than simply signing a cheque or leaving a sum of money to a charity in a
Will.
In many
cases, a client needs professional advice to assist in assessing the
options. Many clients are unaware of the giving
alternatives. For professionals providing estate
planning advice - whether it is Will preparation, tax planning, assessing
insurance needs, or investment planning - it is becoming incumbent upon
such advisors to include a discussion of charitable giving.
Planned
gifts can take many forms including:
-
cash gifts
and bequests,
-
gifts of
property,
-
gifts of
publicly traded securities,
-
gifts of stock options,
-
life
insurance,
-
critical illness insurance,
-
charitable
annuities,
-
charitable
remainder trusts and
-
gifts of
remainder interests in property.
Professional
advisors will often need to work together with the charity to structure a
gift that provides maximum tax savings to the individual while providing
effective assistance to the charity.
The 100% of
net income donation limit in the year of death and in the preceding year
may create a bias toward estate gifts. However, this
will depend on the size of the gift and the client's net income for the
relevant years.
The annual
limit of 75% of net income provides opportunities to increase lifetime
gifts. Each client's situation must be analyzed to
determine which is more beneficial: giving now or deferring the gift to
the estate or a combination of both.
Whether it
is the donation of shares, capital property, stock options, an insurance
policy or the assignment of a policy, there are numerous tax advantages
available to donors. Charitable donations should never
be purely tax motivated but the tax savings that can be achieved both in
life and at death go a long way to encouraging philanthropy and rewarding
those who explore the numerous opportunities available to them.
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(866) 272-3112
