CHARITABLE GIVING

We strive to assist our clients so that they can achieve their charitable goals in a manner that will afford them the greatest income and estate tax advantages. We advise our clients with a multitude of charitable recommendations ranging from lifetime gifts or programs to the creation of charitable foundations and other complex trust arrangements. At Underberg & Kessler, we take pride in helping our clients structure their charitable giving in a manner which benefits both the cause they are giving to and their estate. We have a team of attorneys who are experienced in structuring charitable giving in a mutually beneficial manner. Our lawyers stand ready to offer assistance and guidance, navigating you through the implications of charitable giving and the best way to structure it.

Can a Decedent’s Estate Claim a Charitable Deduction?

It depends. The Internal Revenue Code (IRC) allows estates and trusts an income tax deduction for charitable contributions; however, wills or trust agreements must contain specific instructions in the document before the testator’s death in order for the deduction to apply. If an element is omitted, the amount donated to charity is not deductible and the estate, trust, or beneficiary must still pay the resulting income tax on the amount donated.

Charitable Giving Options

There are a number of charitable giving options that can be employed as a part of a well-rounded estate planning plan. Our estate planning attorneys would be happy to discuss these options with you to gauge their viability in your estate planning. They include but are not limited to:

Lifetime gifts

Each individual can only give up to a predetermined amount in their lifetime. This amount is set by the IRS and is subject to change. Furthermore, gift recipients can only receive gifts up to a IRS-determined amount annually. This amount is also subject to change. Our estate planning attorneys stay up-to-date on all of the details and stand ready to advise you, helping you achieve your estate planning goals.

Lifetime Gifting Programs

A regular program of lifetime gifting can substantially reduce an individual’s estate tax bill. One gifting program, called the federal annual exclusion gift, allows individuals to make tax-free gifts each year to any number of individuals up to a specified amount. As recently as 2020, this amount was $15,000 per recipient ($30,000 for a married couple). The second gifting program allows individuals to make direct payments of tuition payments on behalf of an individual, free of federal gift tax. These two simple lifetime gifting methods when used as part of a regular annual giving program can be a powerful way to reduce an individual’s taxable estate.

Creation of a charitable foundation

There are several benefits to starting a charitable foundation from an estate planning perspective. Depending on your estate planning goals and situation, the process of creating a charitable foundation will vary. Our estate planning lawyers are well-versed in the process and would be glad to assist you.

Complex trust arrangements

Complex Trusts may retain all or part of their current income and, if directed by the trust instrument, may make charitable contributions.