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561-962-2775

 

Charitable Planning

Chamberlin Financial now has a strategic partnership with Legacy Tree Foundation to offer charitable planning services to our clients.  

Legacy Tree Foundation ("LTF") was originally established as a 501(c)(3) public non-profit organization in 1999 to fund faith-based outreach and education supporting food banks in Bulgaria, Thailand, and Peru. In 2009, the mission was expanded to include support for a broader range of domestic and international humanitarian work and aid for the poor. Additionally, LTF expanded their fundraising capabilities by implementing charitable planned giving programs.

LTF is staffed by a team of professionals seasoned in the financial services industry, followed by years of collective experience working with nonprofit charitable organizations, where they have facilitated and closed hundreds of planned giving transactions in excess of $100 million dollars.

LTF is committed to bringing the highest level of expertise and integrity to every partnership they develop and every transaction that is facilitated. LTF only works directly with advisers, not the public so you must work directly with an adviser who works with Legacy Tree Foundation.


Amid predicted tax hikes and market volatility, with 85% of Americans already giving to charity, charitable planning remains a largely untapped opportunity.  There are simple programs which can be easily implemented that can provide enhanced tax savings and income benefits for you. Charitable planning can be beneficial not only for tax and philanthropic benefits but for income planning as well.

Think about how you could benefit from an immediate charitable income tax deduction. The deduction can be utilized to reduce your Adjusted Gross Income (AGI) by up to 50%. If the tax deduction is large enough that it cannot be utilized fully in the first year, the remaining amount can be carried forward for up to 5 additional years. Examples of people who might be able to utilize these tax deductions are:

  • Annuity owners who would prefer NOT to pass along lump sum annuity gains to their heirs.
  • People who are taking RMD’s that they currently neither want nor need.
  • People who earn enough in social security, pension and other investment income that they are making quarterly tax payments.
  • Families who experience an unusual year of inflated income due to the sale of a business, real estate, or another type of windfall.
  • Put real dollars back in your pocket.


By understanding the basic features of charitable gift annuities and charitable bargain installment sales, you can strategically unlock assets, create tax deductions and set up structured payments for your heirs while also supporting your favorite charities. These simple programs include:

  1. The charitable bargain installment sale, which provides either an immediate or deferred structured income payout to your family for a set number of years.
  2. The traditional charitable gift annuity, which creates an immediate or deferred lifetime payout for up to two individuals.

 

Many people create this substantial charitable tax deduction then utilize it to unlock or re-characterize qualified money in a tax-free manner.

For example, let’s say you have an adjusted gross income of $100,000. You utilize existing cash assets to fund a charitable program that creates a $50,000 tax deduction. The deduction can either be utilized to reduce your AGI, you can do a $50,000 Roth conversion or take a $50,000 qualified distribution, potentially without any tax consequences.

The charitable program also creates a structured inheritance without the costs of setting up or administering a trust.

When funding charitable programs with appreciated assets such as securities and real estate, not only do you benefit from the immediate charitable income tax deduction, but either all or a portion of the capital gains taxes you would otherwise have to pay are eliminated.

Additionally, the income tax deduction from a charitable program may reduce your overall income tax bracket and as a result, could lower your applicable capital gains tax rate.

Lastly, with the new, higher capital gains tax bracket of 20% now in place for certain taxpayers, charitable planning can be even more of a useful tool.

One benefit of a reinsured charitable program versus a Charitable Remainder Trust is that with a trust, the charity usually has to wait to receive funds until the payout period is over. In the case of a non-reinsured charitable gift annuity, the annuitant(s) have to die before the charity has any funds available. However, when a charity reinsurers an income obligation, the money available for use by charities is freed up immediately.

Overall, charitable planned giving is one of the few programs available that provides a variety of tax and income benefits and should be strongly considered as an additional planning tool for the individual or family.