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The Advantages of Charitable Trusts

by Christine S. Fahlund

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The Advantages of Charitable Trusts

Charitable trusts allow you to donate assets, while providing lifetime income for yourself or someone else. They can also reduce estate taxes on appreciated assets.

Christine S. Fahlund , Ph.D. and CFP, is a senior financial planner and vice president of T. Rowe Price Group, an investment management firm based in Baltimore, Maryland.


Discussion

James Merchant from Massachusetts posted 6 months ago:

I would like to see the ETF substitutes for the Mutual Funds that you use. I prefer using ETF's because they are easier to trade, and their fees tend to be less.


Harold Helson from Massachusetts posted 6 months ago:

Interesting topic. Can the trusts be revocable should hard financial times ensue?


Ken Milder from New Mexico posted 6 months ago:

Harold raises a good question. While revocable trusts exists, the charitable tax advantages of these vehicles might make them irrevocable. I know that a portion (I believe 10% minimum) of a Charitable Remainder Unitrust must be irrevocable. The 10% minimum is based on the initial fair market value of the assets transferred into the trust.


Charles Kaminski from Washington posted 5 months ago:

Potential issue with respect to selling concentrated, highly appreciated positions in order to reposition. Trust may have to pay taxes which reduces corpus.


Victor Bradford from Colorado posted 5 months ago:

--Thank you for your generosity in providing this article to us all.
--We investigated this option and found the received interest rate from a charity compares very favorably with that for a conventional annuity.
--Please discuss your plans with your charity's donor department. Ours gave several options, including a life insurance policy, annuities, and a simple gift. Our charity, for example, encouraged us to simply gift appreciated securities because they felt it involved less uncertainty and fees (and gave us a greater tax deduction). I might consider that option if you anticipate adequate pension income.
--I would also encourage you to remember that future tax policy may be changed and today's charitable tax policy may be significantly more favorable (and is more certain) than future policies. A deduction in the hand today may be worth more than a fraction of that deduction in the future.


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