Charitable Giving and Estate Planning: Maximizing Your Impact and Tax Benefits

The National Philanthropic Trust reports that there are more than 1.8 million legally recognized charitable organizations in the United States. Are you considering leaving money, property, or assets to support a good cause? It is imperative that you have the right plan in place. At The Law Offices of Odelia Goldberg, we help clients access all available tax benefits, so that they can most effectively maximize their impact. Here, our Fort Lauderdale estate planning lawyer highlights the key things you should know about charitable giving strategies in Florida. 

A Comprehensive Overview of Charitable Giving Strategies 

If you are considering making a gift to support a charitable cause in Florida, you should carefully consider your options. It is essential that you have a comprehensive estate planning strategy in place so that you can do right by yourself, your family, and the good cause that you want to support. A top-tier Florida estate planning lawyer can help you evaluate your options so that you can make the maximum possible impact with your generous gift. There are actually a number of different estate planning strategies available for charitable contributions. Here are notable options: 

• Direct Gift: You can always give a direct gift to a charity. It can be done during your life or using your will. Indeed, a direct donation allows a person to make a straightforward donation to a charitable organization. It provides immediate support to a good cause and it is the simplest form of charitable giving. Donors may also receive a tax deduction for the value of their contribution—though it may not always be the maximum deduction possible. 
• Gift of Appreciated Asset: A gift of appreciated assets involves donating stocks, bonds, or real estate that have increased in value. By giving these assets, the donor avoids capital gains taxes that would be owed if the asset were sold. The charitable organization receives the full value of the asset. It is a legacy planning strategy that can potentially offer major tax savings and a larger gift to the charity. 
• A Charitable Trust: A charitable trust is an entity that can be created as part of your estate plan to hold assets that are being donated to a charity. It allows donors to set aside money or property for future charitable donations while retaining some control over use. The trust may provide income to the donor or beneficiaries for a set period before the remaining assets are given to charity. There may be highly desirable tax advantages. 
• Donor Advised Fund: A donor advised fund is an account established with a public charity that allows donors to recommend grants over time. Contributions to the fund are tax deductible at the time of the donation—even if the funds are distributed later. It offers flexibility in timing and amounts of charitable giving. The donor retains advisory rights but the fund manages the administration. It may be a great option for a person who wants to make a large contribution to a specific charity. 
• Private Charitable Foundation: A private charitable foundation is an independent legal entity. It can hold funds or property and makes grants to support charitable causes. Notably, these foundations are subject to specific regulations and reporting requirements. They are costly to set up—but can be a great tool for a person who wants to make a large gift and retain some control over how funds are used. 

Know the Difference: Charitable Lead Trust vs Charitable Remainder Trust

There are actually two different types of common charitable trusts in Florida — a charitable lead trust and a charitable remainder trust. Which option is the right choice for your situation will depend on your needs and objectives. Here are the key points to know about these estate planning tools: 

• Charitable Lead Trust: One estate planning option to leave support to a good cause is to use a charitable lead trust. Also referred to simply as a CLT, this type of trust establishes a way to benefit a charity by allowing it to receive regular payments from the trust for a set period. During the time that the trust is active, the selected charity will get the income generated by the trust’s assets. Following the expiration of the term the assets either revert to the donor or, if desired, they will pass to another selected beneficiary, such as a family member. A charitable lead trust in Florida can provide tax advantages. It may reduce tax obligations, potentially including the gift tax or estate tax. At the same time, these trusts allow donors to keep control over their principal. 
• Charitable Remainder Trust: A charitable remainder trust (CRT) is, in some ways, the inverse of a charitable lead trust. How does it work in Florida? The donor transfers assets into a trust which then pays a stipend to the donor—or other named beneficiaries. It can last for life or for a predetermined amount of time. At the end of this period the remaining assets within the trust will go to a chosen charity. Why is it a good option to support a charitable organization? The beneficiaries of the trust enjoy a stream of income and receive tax relief from making a charitable deduction. At the same time, a charity will ultimately be supported by the remaining assets within the trust. 

To provide the greatest tax benefits and support a good cause, a charitable trust must be set up in the proper manner. A Fort Lauderdale estate planning attorney who has experience with charitable giving strategies can help you put the right trust in place for your specific situation. 

Contact Our Fort Lauderdale Estate Planning Lawyer Today

At The Law Offices of Odelia Goldberg, our Fort Lauderdale estate planning attorney is standing by, ready to help you find the most efficient solution. Leaving financial support to a good cause is extremely generous—our team can help you do it the right way. If you have any questions about estate planning strategies for charitable giving, please do not hesitate to contact us today. We provide estate planning support in Fort Lauderdale, Broward County, and across Southeast Florida.