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“Giving is not just about making a donation. It is about making a difference.” Those words (from Kathy Calvin, president and CEO of the United Nations Foundation) powerfully define the altruism behind charitable giving.
If you’re looking for a way to make a difference by financially supporting a charitable organization, there are ways Bell Bank Wealth Management can help you accomplish that goal – and reap the benefits of some tax advantages. One is through a charitable remainder trust.
Helping our clients put a framework around what they’re passionate about makes the planning process that much more meaningful. And setting aside a portion of your income for charitable donations – especially if you have a significant amount of extra income during a particular tax year – can minimize your taxation.
What it is: Charitable Remainder Trust
If you want to leave a legacy to a charity or cause you believe in, a charitable remainder trust can provide you with income and tax benefits.
How it works: You establish the trust for your lifetime, for your life and the life of your spouse or other beneficiary, or for a term of up to 20 years and receive an income from the trust during that period.
You get an immediate tax deduction for your donation (subject to IRS limitations), and the trust won’t have to pay capital gains tax on the assets’ appreciation. You are taxed only on the income you receive from the trust.
To qualify for tax benefits, your charitable remainder trust must be in the form of either a unitrust or an annuity trust.
When the trust ends, the remaining assets transfer to your designated charitable organization.
▶ Contact us for help working toward all of your financial goals – including philanthropic giving. We will collaborate with your tax advisor and estate planning attorney to make sure your financial plan helps you work toward your financial goals.
Becky Walen, AFC®, CFP®
SVP/Senior Wealth Management Advisor
This article has been written for the general information of clients and friends of Bell Bank. It is not intended, nor may it be relied upon, as tax or legal advice with respect to any matter. This newsletter also cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by the Internal Revenue Service or other taxing authority.
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