No doubt you are reading plenty about potential tax planning strategies in an uncertain post-election environment. Now is a great time to lean on the team at the Community Foundation as you work with your attorney, CPA, and financial advisor to determine whether and how to update your estate and tax plan. Here are three examples of the wide range of charitable planning topics we’d be glad to discuss with you and your advisors as you look into the future:
Time for a charitable lead trust? The team at the Community Foundation can help you and your advisors evaluate whether a potential continuation of low interest rates might mean that a charitable lead trust would be a good fit for you. Through a charitable lead trust, you can arrange for an income stream to flow into your fund at the Community Foundation while future asset appreciation passes to your heirs, minimizing tax consequences. You can also use a charitable lead trust to take advantage of the presently high estate tax exemption, especially in light of uncertainty as to whether it will continue past the end of 2025.
Bunching your charitable gifts. Right now, the standard deduction is still high. It’s a good reason to consider making a gift to a fund at the Community Foundation this calendar year that allows you to itemize your deductions. If you give appreciated stock to your donor-advised fund, for example, you can not only avoid capital gains tax, but also use a large gift this year to support your favorite charities now and for years to come.
Use your IRAs for charitable giving. Even with all the question marks, it is reasonably safe to suspect that IRAs will remain excellent tools for charitable giving. If you are over the age of 70 ½, absolutely get in touch with the Community Foundation team to arrange for a tax-savvy Qualified Charitable Distribution of up to $105,000 (increasing to $108,000 in 2025) to a designated, field-of-interest, or unrestricted fund at the Community Foundation. And, regardless of your age, it is worth considering naming your fund at the Community Foundation as the beneficiary of your IRA or other qualified plan because not only is estate tax avoided, but your fund won’t trigger the income tax that would apply if IRA proceeds flowed to your heirs.
Contact Us
The net-net here is that we encourage you to reach out! The team at the Community Foundation is here to help you support your favorite causes. It is our honor to serve as your home for charitable giving. Contact our team to learn more: Marcia Shackelford, Chief Philanthropy Officer, at mshackelford@pacf.org or Michael Nuno, Vice President of Philanthropic Services, at mnuno@pacf.org.
