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Recent Articles
- Protected: CONSERVATION EASEMENTS CAN SAVE THE FAMILY FARM OR RANCH
- Protected: Section 2032A Valuation Discounts May Save the Family Farm or Ranch
- Protected: Section 6166 Deferral of Estate Taxes Related To A Closely Held Business
- THE ZERO ESTATE TAX PLAN AND THE TESTAMENTARY CHARITABLE LEAD ANNUITY TRUST
- CHARITABLE IRA
- Protected: GRANTOR TRUST
- Protected: SALE OF A MINORITY INTEREST IN S CORPORATION STOCK TO A GRANTOR TRUST
- CHARITABLE REMAINDER TRUSTS
Charitable Planning
Charitable IRA
Although an IRA may be a valuable asset while a person is alive, it is severely taxed at death. In fact, the IRA is a tax magnet at death since the combination of estate and income taxes can produce a long-range effective tax rate in excess of 65%.
The Zero Estate Tax Plan
By using a Zero Estate Tax Plan or Testamentary Charitable Lead Annuity Trust, you may be able to:
- Leave your entire estate to your family and favorite charities
- Pay no estate tax
- Keep control over your assets during your lifetime
- Have a simple plan that can be changed at any time up until your death
- Have a plan that works even if the estate tax is ever permanently eliminated
Zero Estate Tax Plan
The Charitable IRA (see our separate explanation of a Charitable IRA) accomplishes a great deal for both the heirs and charity. The same approach can be applied with all the estate assets – in other words, a Zero Estate Tax Plan (ZETP). You would 1) determine in advance an appropriate inheritance for the heirs, 2) make gifts to a Wealth Replacement Trust of the funds necessary to purchase insurance in that amount, and 3) arrange at death to leave all estate assets to your favorite charities. The financial advantage of this arrangement is
Testamentary Charitable Lead Annuity Trust
2011 Qualified Charitable Distribution
Charitable Remainder Trusts
Charitable giving can be a cornerstone of your estate plan. A charitable remainder trust can be a wonderful planning technique when one owns low basis/ high value assets. Under a charitable remainder trust you would generally contribute appreciated assets to the trust and retain an interest for your life or the joint life of you and your spouse.
There are two types of charitable remainder trusts. A Charitable Remainder Annuity Trust ( CRAT ) pays you a fixed amount for the rest of your lives, regardless of what happens to the value of the principal in the trust. A Charitable Remainder Unitrust ( CRUT ) pays you a percentage of the fair market value of the assets, as recalculated each year. After you both die whatever assets then remaining in trust will be paid to the charities of your choosing.
