We work with individuals and families to design adavanced charitable giving strategies and plans tailored to their unique situation.
We can design a plan to help:
● maximize your current charitable income tax deduction
● increase your annual giving program while decreasing your expense
● eliminate capital gains taxes on the sale of highly appreciated assets
● maximize your current or future income
● protect/increase the amount of money left to your heirs
● make a significant gift to your favorite charity or charities
● reduce or eliminate estate, GST and gift taxes
We will work with your existing advisors (lawyer, accountant, insurance agent, financial advisor, etc.) or recommend ones if needed. Our role is in complement to theirs. For example, we will assist your financial advisor with the details of managing money inside a charitable trust. We work with your attorney to ensure the income provisions of the trust meet your exact needs. These and many other areas are very unique to advanced charitable gift startegies and must be handled with care.
Financial Solutions, Inc. charges hourly fees or flat project fees depending on the circumstances. After our initial meeting and learning exactly what your needs are, how much work is entailed, how complex the strategy, etc., we are able to give you a quote. Typical initial costs may include design & planning fees, attorney fees, appraisal fees (if necessary) and accounting/administration set-up fees.
1. Mr. Smith has worked for ABC Company for many years. He has accumulated a substantial numbers of shares of ABC Company stock. His cost basis in the shares is very low which means he faces a large capital gains tax when the shares are sold. Mr. Smith is taking a large risk by having so much of his portfolio invested in one stock and would like to diversify. Mr. Smith can use a Charitable Remainder Trust to sell the shares, eliminate the capital gains tax and diversify his portfolio.
**The scenario above is fairly common, but sometimes clients are unsure they want to donate all of their stock to the trust. An alternative is to "test drive" the charitable trust. As long as the trust is structured properly, Mr. Smith can make a small donation now and then add to the trust later on. This allows him to get some tax and income benefits from a portion of his assets without committing everything at once.
2. Mr. Bojangles gives $5000 every year to his favorite charity. The organization is beginning a capital campaign to last the next five years. Mr. Bojangles uses a Charitable Lead Trust to double his annual gift to $10,000 for a period of five years to coincide with the capital campaign.
3. Ms. Walters owns a piece of vacant land which produces no income. She is paying taxes on the land each year. Ms. Walters would like to sell the land and invest the money into investments that will provide her with more income. She would also like to create a legacy gift to her church. Ms. Walters can use a Charitable Remainder Trust to sell the land. She will avoid capital gains taxes which means there is more money to invest in income producing investments and therefore more income for Ms. Walters. Upon her death, the church will receive the remainder of assets in the trust.
4. Mr. & Mrs. Johnson have substantial assets which produce more income than they need each year. They would like to give some of their portfolio to their son, however, they will incur gift taxes if they transfer more than a certain amount in one year. The Johnsons have also been active in several local charities and make generous gifts each year. The Johnsons can use a Charitable Lead Trust to solve their problem. A portion of their investment portfolio can be transfered to the CLT. The trust will then pay income annually to the Johnson's favorite charities. After a set number of years, the trust will pass the remaining balance to their son. By having used this technique, the Johnsons will be able to reduce and possibly eliminate gift taxes as well as reducing their annual income taxes.
5. The Wilsons are retired and have a nice portfolio worth $500,000. They receive pensions, Social Security and the income generated by the investment portfolio. The Wilsons would like to make a meaningful gift to a local youth center, yet continue to receive income generated from their portfolio. They can donate a portion of their investment portfolio to a charitable gift annuity, a pooled income fund or a Charitable Remainder Trust. All will allow the Wilsons to continue to receive income during their lifetimes. They will also receive substantial tax deductions that they can use right away to reduce their income tax bill.
6. Ms. Thomas' estate will be subject to a very large estate tax bill upon her death. Ms. Thomas would like her children to inherit all of her estate and is appalled at how much of her money will go to pay death taxes. Ms. Thomas is an active philanthropist, having served on numerous non-profit organizations boards. She likes the idea of donating substantial assets to a Charitable Remainder Trust in order to avoid estate taxes on those assets, however, she is still concerned about her children. Ms. Thomas can use a Wealth Replacement Trust to purchase life insurance on herself for the full value of the assets transferred to the CRT. If designed properly, the proceeds from the life insurance will pass to her children estate and income tax-free.
7. Mr. Rollins owns a mid-sized manufacturing business. He is ready to retire and has had some interest from prospective buyers. Mr. Rollins is concerned about the taxes involved with the sale, estate taxes and his income after the sale. He can donate some or all of his stock in the business to a Charitable Remainder Trust and address all three issues at once.
These are just a handful of common situations that can benefit from charitable gift planning techniques. Please use the Contact Us button at the top of this page to have us review your particular situation.
These are hypothetical examples and not representative of any specific investment. Your results will vary.