Implementing Gifting Strategies

This section outlines six gifting strategies that may be feasible solutions to your estate planning needs.

1. Outright Gift - An outright gift, such as cash, is an efficient way to donate and take advantage of deducting the amount on your income taxes; however, retained interest is not associated with this strategy.

2. Charitable Lead Trust - A charitable lead trust allows you to pay income to an organization over a period of time and pass the principal on to your beneficiaries. This method also alleviates a portion of gift and estate taxes; however, you cannot reverse the transfer of assets and the donor is unable to access the income of the trust throughout its duration.

3. Pooled Income Fund - A pooled income fund is tax deductible and permits beneficiaries to receive income indefinitely; however, this income is not usually a consistent amount and is subject to taxation as ordinary income.

4. Charitable Remainder Unitrust - With a charitable remainder unitrust, you can expect to be able to deduct the amount from income taxes, lessening future estate taxes, and circumnavigating capital gains taxes on appreciated property; however, like a charitable lead trust, you cannot reverse the transfer of assets and the process of establishing one is tedious.

5. Charitable Remainder Annuity Trust - A charitable remainder annuity trust pays you a consistent income on a yearly basis and is immediately tax deductible; however, the process of establishing one is tedious.

6. Gifts of Insurance - A gift of insurance allows you to donate an unneeded policy and is tax deductible; however, is potentially subject to yearly premiums.

This information is presented to educate the reader and does not constitute professional tax and legal advice.

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