Enhancing
Charitable Trusts with Donor Advised Funds
Charitable
Remainder Trusts
Donors
can create an opportunity for continuing family involvement by naming
American Endowment Foundation as the remainderman on a Charitable Remainder
Trust. Here's how it work:
-
A
donor contributes to a CRT, receives capital gains tax benefit, income
tax deduction, and lifetime income stream.
-
At
termination of trust, the remainder interest is transferred to a Donor
Advised Fund at American Endowment Foundation.
-
A
donor's family can stay involved in these meaningful assets after
the CRT terminates. The family can then recommend distributions from
the Donor Advised Fund to charities over time.
Benefits:
1) Continuing
family involvement.
2) This
strategy eases the pressures associated with deciding the ultimate charities.
AEF, an IRS recognized 501 (c)(3) charity, qualifies for the maximum
and immediate tax deduction .
3) The
donor can use the Donor Advised Fund as the vehicle for their lifetime
charitable giving.
4) When
income from the CRT is no longer needed, the Donor Advised Fund can
become the charitable overflow to the CRT.
5) If a
donor wants to accelerate a CRT in order to give more to charity now
or in the near future, he/she can collapse the CRT into a Donor Advised
Fund.
see terminating
a Charitable Trust
Naming
AEF as income beneficiary on a Charitable Lead Trust
A donor contributes an asset to a CLT for a specified period (either
a term of years or someone's life), and receives tax benefits.
Distributions
are made annually from the CLT to the family's Donor Advised Fund.
The donor,
and then children recommend distributions periodically to charities
from the family Donor Advised Fund.
After specified
period, the principal goes to your family (or other designated beneficiaries).
Benefits:
1) Continuing
family involvement.
2)
provides a unique forum for families to work together.
3)
offers the opportunity for several generations to join in a common purpose.
4) may become the “link” that connects families whose branches
are increasingly geographically dispersed.
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