Important Information - Charities & Charitable Gift Planning

Charity Advisor Resource

Newsletter

Volume 1.1 -

2009

Greetings!

The Law Office of Jonathan Ackerman, LLC and Charitable Registry, LLC sponsor the Charity Advisor Resource (CAR) Newsletter. The CAR Newsletter is a tool to educate all persons with an interest in charitable organizations and charitable gift planning. The CAR Newsletter will (i) build a fundamentals track of educational information for those persons new to charities and charitable gift planning, (ii) provide an advanced track for those persons who deal with the technical issues, (iii) present case studies to provide a practical understanding of the tools and traps in closing an irrevocable charitable gift or creating a complex charitable entity, and (iv) discuss topics of current interest.

In This Issue

Featured Article - What's Hot Now!

Technical - Discount Planning and CLTs

Fundamentals - Charitable Lead Trust

Solicitations Corner - Hawaii Adopts Registration Requirement Starting March 1, 2009

Featured Article - What's Hot Now!

Donors have until the end of April, 2009 to take advantage of the most favorable interest rates for creating a CLT since the monthly federal rate was established more than 20 years ago. In fact, the lower the interest rates applicable to a CLT contribution, the lower the present value of the remainder gift to heirs, or correspondingly, the larger the present value of the charitable lead interest.

Thus, if the donor is desirous of obtaining the largest charitable income tax deduction available, he or she would create either an inter vivos grantor charitable lead annuity trust (CLAT) or a super grantor CLAT. If however, the donor is desirous of transferring the maximum amount to children with the minimum estate and gift taxes, or even estate and gift tax-free, he or she would consider a non-grantor or super grantor CLAT. Click here to learn more about the different types of CLTs.

The perfect storm? Since many assets now owned by donors are significantly depressed in value, the funding of a CLT may present a unique opportunity, because any growth in value of the CLT's assets during the CLT term greater than the low interest rate factor will also pass to heirs either minimizing or eliminating the estate and gift tax. [more...]

Technical - Discount Planning & CLTs

Combining CLT and discount planning can produce powerful results. Certain types of assets are discounted from fair market value, such as a family limited partnership (FLP) interest, an undivided interest in real estate or possibly a promissory note with inadequate collateral, among others. The reason a discount may be applied to an FLP interest, for instance, is due to restrictions on the ability of a limited partner to sell that interest or on the ability to receive distributions of cash flow. Click here to see an economic spreadsheet illustrating the benefits of contributing a discountable asset to a CLT.

Click here to learn more about proposed legislation that could impact the use of discountable assets in charitable gift planning. Also see the Featured Article What's Hot Now! for a discussion regarding the favorable impact of the current low interest rates on CLT planning.

Fundamentals - Charitable Lead Trust