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Charitable Giving

Everyone has their own reason for gifting their assets or a portion of their income to charitable organizations.  Some find comfort in helping others who are less fortunate, while others simply want to share their good fortune.  Many of the institutions of art, sciences and education are supported in large part by those who want to give something back in appreciation for their contributions to the community or the individuals themselves. 

Presently, the tax code offers incentives for gifting of one’s assets or incomes. Tax deductions are given for current contributions and, for estate owners, charitable gifts can reduce the size of the estate to help minimize estate taxes.

Often times, an individual will designate a charitable beneficiary in their will to benefit the organization after the individual dies.  By using charitable gifting techniques, a donor may be able to benefit the charity while living without having to sacrifice the income that an asset can generate.  Understanding how properly structured charitable gifts can provide current benefits for both the donor and the charity could be important for the charitably inclined.

 

Charitable Remainder Trust

A remainder trust enables the donor to transfer an asset while retaining the right to the income it generates. The asset becomes the “remainder” which is owned by the charity.  Remainder trusts, if properly structured, can qualify for a current tax deduction.  There are three types of remainder trusts:

Unitrust: A unitrust the income the donor receives is based on a percentage of the current fair market valuation of a trust asset. Each year, as the asset is valued, the income is adjusted based on the new valuation.

Annuity Trust: Instead of a percentage of the asset value, the donor is paid a fixed amount annually.

Pooled Income Fund: Donors can pool their donated assets in a fund that is operated by the charitable organization. The donors then receive a proportionate share of income from the fund that is paid throughout their lifetime.  Payments can vary each year based on the valuation of the underlying assets in the fund.

 

Charitable Lead Trust

Also known as an Income Trust this vehicle transfers the income rights to the charitable organization. Generally, the income rights are assigned for a specified period of time after which the remainder passes to the donor. 

Charitable planning involves tax issues that should be discussed with a qualified tax or financial professional.

For more information of charitable planning, please contact us today.

Erma Harbison is an Associated Person of LPL Financial.     Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Securities and advisory services offered through LPL Financial, a registered investment advisor,  Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. The investment products sold through LPL Financial are not insured Merck, Sharpe, Dohme Federal Credit Union (MSDFCU) deposits and are not NCUA insured. These products are not obligations of MSDFCU and are not endorsed, recommended or guaranteed by MSDFCU or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. MSDFCU and New Britain Financial Advisors are not registered broker-dealers nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are offered exclusively through our U.S. registered representatives. LPL Financial U.S. registered representatives may only conduct business with residents of the states for which they are properly registered: CA, CO, CT, DC, DE, FL, GA, IL, IN, MA, MD, MI, MO, MT, NC, NJ, NY, OH, PA, RI, SC, TX, VA, & WA. Please note that not all of the investments and services mentioned are available in every state.   This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting, or tax advice. You may wish to consult an attorney, tax advisor, or accountant regarding your specific situation. No representations are made as to the accuracy of the information contained herein or any information contained in any link provided herein.   LPL does not provide legal advice.   Third party posts found on this website do not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness.   Important Consumer Information:   This site is for informational purposes only and is not intended to be a solicitation or offering of any security and;   1. Representatives of a broker-dealer ("BD") or investment advisor ("IA") may only conduct business in a state if the representatives and the BD or IA they represent (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state's licensure requirements.   2. Representatives of a BD or IA are deemed to conduct business in a state to the extent that they provide individualized responses to investor inquiries that involve (a) effecting, or attempting to effect, transactions in securities; or (b) rendering personalized investment advice for compensation.

Erma Harbison is an Associated Person of LPL Financial.
 
 

Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

Securities and advisory services offered through LPL Financial, a registered investment advisor, 
Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

The investment products sold through LPL Financial are not insured Merck, Sharpe, Dohme Federal Credit Union (MSDFCU) deposits and are not NCUA insured. These products are not obligations of MSDFCU and are not endorsed, recommended or guaranteed by MSDFCU or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.

MSDFCU and New Britain Financial Advisors are not registered broker-dealers nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are offered exclusively through our U.S. registered representatives. LPL Financial U.S. registered representatives may only conduct business with residents of the states for which they are properly registered: CA, CO, CT, DC, DE, FL, GA, IL, IN, MA, MD, MI, MO, MT, NC, NJ, NY, OH, PA, RI, SC, TX, VA, & WA. Please note that not all of the investments and services mentioned are available in every state.

 
This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting, or tax advice. You may wish to consult an attorney, tax advisor, or accountant regarding your specific situation. No representations are made as to the accuracy of the information contained herein or any information contained in any link provided herein.
 
LPL does not provide legal advice.
 
Third party posts found on this website do not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness.
 
Important Consumer Information:
 
This site is for informational purposes only and is not intended to be a solicitation or offering of any security and;
 
1. Representatives of a broker-dealer ("BD") or investment advisor ("IA") may only conduct business in a state if the representatives and the BD or IA they represent (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state's licensure requirements.
 
2. Representatives of a BD or IA are deemed to conduct business in a state to the extent that they provide individualized responses to investor inquiries that involve (a) effecting, or attempting to effect, transactions in securities; or (b) rendering personalized investment advice for compensation.

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