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Charitable Planning

Charitable Planning

 

Charitable giving is one of the most effective ways of changing the world.  When creatively implemented, it is also an effective way to instill values in younger generation family members. To encourage charitable giving, the Internal Revenue Service has a complex set of tax breaks for different kinds of charitable giving.  Taking advantage of those rules allows you and your charities to get more out of your giving.

The most common charitable gift is the direct gift of cash or property.  But direct gifts often aren’t the most effective ways to give.  That’s where charitable planning comes in. Through the use of estate planning techniques you and your charities can get more out of the giving you’re already doing or are planning to do.   A few of the more common strategies are described below.

Charitable Remainder Trusts

This is an excellent planning tool and is useful in a variety of planning situations.  One of the most common situations where a Charitable Remainder Trust (CRT) is used is in the sale of appreciated assets. A CRT pays you first and your charities second (ie. the charities get what’s left—the “remainder”).  You get to use the property placed in the CRT for a number of years via an annuity payment from the trust.  At the end of the annuity term, the remainder goes to your charities.  Even though the charity receives its gift in the future, you will receive an immediate income tax deduction based on the projected future gift.This strategy works especially well with highly appreciated property because the CRT can avoid capital gains taxes on the sale.

There are many variations of CRTs with similar names (for example CRAT, CRUT, and NIMCRUT) that have slightly different terms.  Payments can be made for a specific number of years or for the life of one or more people.  And the annual payments can be fixed, based on a percentage of the assets, or based on the net income of the trust.  There’s enough variety to fit just about any situation.

Charitable Lead Trusts

A charitable lead trust pays your charities first and your family second. Distributions are made to charities for a number of years, before any distribution is made to family members–hence the term “lead” trust. Unlike the charitable remainder trust, the charitable lead trust doesn’t give you an income tax deduction.  Instead, the CLT allows you to make a gift to your beneficiaries but have it treated as a much smaller gift (or as no gift at all) for gift tax purposes.  At the same time, it effectively allows you to bypass your charitable deduction AGI limit because gifts made by the CLT aren’t included in your limit.

A charitable lead trust can be very effective with property that will either produce significant income or appreciate rapidly in the future.  All told, it’s a great way to make charitable gifts and pass extra income or growth onto your heirs estate and gift tax free.

Other Charitable Planning Tools

There are many other charitable planning tools, and each can be the ideal solution in specific situations. For example:

  • Charitable gift annuities

  • Charitable life estates

  • Private foundations and family foundations

Planned Giving is Good For Your Charity

Your favorite charities can get a significant boost from your charitable planning:

Good for You Too

While the income tax deduction provided by a charitable gift is often the initial motivator for making a charitable gift, charitable planning can do much more for you:

  • Make gifts that effectively allow you to exceed the charitable deduction AGI limit, while helping your family at the same time

  • Avoid future capital gains taxes by donating appreciated property with more leverage

  • Make charitable gifts now while retaining the income that you need to support your lifestyle

What Our Clients Experience

  • C.C. Dedham, MA

    My daughter was acquainted with Greta Atchinson, so when I had a need I naturally went to them. Both Greta and Dennis Sullivan have treated me wonderfully well! I’ve been very satisfied with the trust they did for me. Greta and Dennis were polite, caring and compassionate. They were very well prepared and helpful. I never felt rushed. I knew I needed to do something but didn’t know what. It was a great decision to go there. They were of tremendous help! Plus as a member of their Lifetime Protection Program I know they’re looking after me, plus whenever I have a question I can call them. I would absolutely recommend their services.

  • Mary McKernan, Needham, MA

    I’m extremely satisfied with the work that was done for my husband and me. Greta and the entire staff are always very helpful and nice. I’d initially found out about the Dennis Sullivan law firm when I was getting ready to retire and received a flyer from the state of Massachusetts that had various information on it. They are great people to know! We go in once a year now for a check-up that they provide. This keeps us very well informed about any developments, plus they answer all of my questions. The Sullivan group gets my highest recommendation!

  • C.B. Wellesley, MA

    We’re very pleased with the estate planning work that was done for us. My husband and I were very comfortable using their services. We originally went to one of their seminars, liked what we heard, and then came in for a consultation. I would definitely recommend going to see the people at Sullivan and Associates!

  • Mike McInerney, Framingham MA

    These people get things done! They got results in a number of different areas for me, such as estate planning, plus they’re still working with me and the state of Massachusetts in some matters involving my late wife. I first became acquainted with the Estate and Asset Protection Law Center of Dennis Sullivan & Associates a few years back. I’d seen an ad in the newspaper and went to one of Dennis’ free seminars, and then booked a consultation with him. He is very informative! Everyone there is very friendly, knowledgeable, and helpful. They are very accommodating people who get things well taken care of. I highly recommend their services!

  • J.S., Boston, MA

    I’m pleased to say they are my law firm! They’ve been very helpful to me over the years. I especially like the fact that they do a yearly check on all of my legal documents. This is a very viable service because things can change over time, and it’s good to know that I’m always current. This is very important, and I appreciate that they do this. These people do good work; they do things right!

  • H.S. Concord, MA

    Everything has gone fine. We first became familiar with the Sullivan Law Firm when we attended one of their seminars, and then made an appointment to come in for a consultation. We’ve been clients ever since. I appreciate that they continue to do a yearly review for us and advise us if we need to make any changes. As the saying goes, it’s good to have your ducks in a row! Everyone there has treated us wonderful. They are a very good group of people.

  • Noel Thyson, Winchester, MA

    I’m very satisfied with what the legal staff has done for me. Interestingly, an attorney I was using for another matter wound up recommending the Estate Planning and Asset Protection Law Center of Dennis Sullivan & Associates. I like the fact that they provide you with useful information, and quick answers. They treat you with dignity and respect. I highly recommend you go see them.

  • Matt DePalo, CPA., Natick

    The experience has been excellent. I am extremely satisfied with the Lifetime Protection Program.

  • I.C., Framingham

    The team at Dennis Sullivan & Associates is very helpful and knowledgeable. Everyone is pleasant and easy to do business with. I don't feel uncomfortable coming in. I interviewed four other attorneys...I'd rather come to you.

  • E.L., Lynn

    Thank you, Dennis, for your expert and caring assistance you have shown to me and my family. It was a trying and confusing process that needed a pro to guide us.

  • C.&J. K., Hopedale

    Thank you for all your hard work and dedication. We appreciate the promptness with which you handled our difficult situation.

  • B.S., Wayland

    We have told friends of our experience with Dennis Sullivan & Associates. We feel it has been very positive and beneficial.

  • Andy St. James, Holliston

    Dennis provided strong direction and guidance in developing and implementing a lifetime protection plan.

  • D.M. Framingham, MA

    We were very comfortable working with you and thank you for your patience in educating us about a process which frankly was quite foreign to us. We are pleased with the outcome and are pleased to recommend you to friends.

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