Qualified Charitable Distributions (QCDs) and Charitable Lead Annuity Trusts (CLATs) have unique importance in today’s market conditions. Given the critical needs facing our community right now, the team at the community foundation wants to reiterate the value of these two planning tools. We’re inviting you to contact us if you have any questions about how these charitable giving techniques can help you immediately support the causes that matter most to you, while also making the most of tax-wise giving.
In the case of Charitable Lead Annuity Trusts, some experts are heralding a “golden age of Charitable Lead Annuity Trusts” because of the convergence of historically low interest rates and depressed asset values.
The timing may never be better for you to use a CLAT to create an income stream for one or more of your favorite charities, including the Community Foundation, thereby satisfying your current goals for amping up philanthropy in this period of extreme need, and simultaneously establish a future gift to heirs with the trust’s remainder.
Don’t overlook Qualified Charitable Distributions, either, as a way to meet the urgent needs of the charities you want to support. The Coronavirus Aid, Relief, and Economic Security (CARES) Act waives Required Minimum Distributions for most taxpayers. The provision includes not only distributions from 401(k)s and IRAs, but also defined benefit pension plans and 457 plans. Taxpayers who have reached 70½ years of age still can take advantage of the Qualified Charitable Distribution, enabling a taxpayer to direct up to $100,000 from an IRA to qualified charities. The distribution is not included in taxable income.
As with any charitable planning vehicle, it is important to consult with your financial advisors and tax professionals as you evaluate whether a particular strategy is right for you. If you or your advisors have any questions, please contact Marcia Shackelford, Chief Philanthropy Officer, at 609.219.1800 ext. 200 or firstname.lastname@example.org.