Professional Advisor Referrals Initiate Trust and Real Estate Charitable Gifts
Two separate clients are working with me to set up Charitable Remainder Unitrusts (CRUTS).
Establishing a CRUT with the Community Foundation is a way to make a generous charitable gift and save taxes while gaining income for life. The donor puts assets in the Trust, which are usually appreciated, and the Trust sells the assets saving you the capital gain taxes. The donor, or pretty much anyone they choose, receives an income stream of 5% or more, usually for life. In addition to avoiding capital gains taxes, the donor gets a charitable gift deduction.
A real estate agent working with a donor who wants to liquidate some of his rental properties initiated one of these gift plans.
The donor is doing estate planning and working on simplifying things for the next generation. The income stream that the CRUT will create is part of the strategy, and usually, it is the tax avoidance combined with that income that drives the decision for a donor to consider a CRUT as a charitable gift.
The charitable gift designation is an essential part of the CRUT equation.
The donor’s decision about what to do with the charitable remainder after they pass on someday is often more difficult than deciding to set up the CRUT. Part of this difficulty is that it is difficult to imagine future needs, maybe 20 years from when the CRUT is established. And it is sometimes overwhelming to consider what to do with such a substantial gift. In my experience, the remainder from a CRUT is usually more than $500k and often more than $1 million. It is a big gift that has the potential to make a big impact. By making their Community Foundation Legacy Fund their beneficiary, donors can add or change causes and named charities at any time through the remainder of their life without ever having to adjust the trust document. Making complicated and extraordinarily beneficial giving arrangements simple is what the Community Foundation does. Some professional advisors call the Community Foundation a “one-stop-shop” because we provide many financial, trust, and legal services you would find commercially. Accepting unique and complex assets and offering our donors expert philanthropic advising is what sets the Community Foundation apart.
The second CRUT that I am working on is even more financially beneficial because their rental properties are in California.
The family loves the idea of selling their properties without having to pay any taxes. You can imagine how pleased they feel about the possibility of receiving an income stream from those properties that California does not tax through their source tax rules! It’s even hard for people to imagine that it is not only possible but that we make it simple. In this instance, the donors were referred to the Community Foundation by their financial/investment advisor. Once the CRUT is established and the property sold, we will invest the CRUT assets with their referring advisor, making the advisor and the donors happy.
Customized charitable gift planning is a cornerstone service of the Community Foundation of Northern Nevada.
We are so very grateful to the professional advisors who refer their tax-savvy and charitably minded clients to us. The Community Foundation has grown to where we are today because of the professional advisors who have made referrals a part of the services they provide to their clients. Without their trust, we would not be able to provide even a small fraction of the support and leadership to the community we currently offer.
I encourage you to bring up the conversation.
Ask your professional advisors if they know about the Community Foundation and if they share information about our services with their clients who may benefit. Together, we can help more people in financial and charitable ways. Ultimately the benefit accrues back to everyone who lives here and calls this place home.
Chris Askin, President/CEO 775-333-5499 Connecting people who care with causes that matter