How to Be a Philanthropist
One of the most rewarding moments in our law practice is when a client’s eyes are opened to the fact that they can give money to their favorite charity that would otherwise go straight to the IRS.
As amazing as that sounds, it is even more astounding when they learn that, through carefully planning their philanthropy, it is often possible to leave MORE of their estate to their children than if they had done no planning at all!
“But I am not Charitably Inclined.”
This is one of the most frequent responses we hear from our clients when we initially bring up the discussion of philanthropy.
Our response is always the same:
“Actually, EVERYONE is charitably inclined. The problem is, most people don’t understand just how charitably inclined they are.”
If you do no estate planning, your philanthropy of choice will be the Internal Revenue Service and the U.S. Treasury, which is currently the largest publicly-supported charity in the world!
Under the Estate Tax rules for 2013, once a family’s Gross Estate exceeds the Unified Credit Amount, the Federal Government will tax the excess at a rate up to 40%!
In addition to the Federal Estate Tax, both Capital Gains Taxes and Income Taxes can be mitigated through the thoughtful use of Family Philanthropy.
You Only Have Two Choices
The truth is, everyone in the United States has the same two options when it comes to Charitable Planning:
- Do Nothing and the Federal Government will continue to tax you at your current Income, Capital Gains and Estate Tax rates; or
- Carefully Plan Your Charitable Giving and you may be able to receive Income, Capital Gains and Estate Tax deductions which will drastically reduce (if not eliminate) your tax liability to the Federal Government.
In addition to benefiting charitable causes that are dear to your heart, you may be able to leave more money to your heirs than if you had paid your taxes without charitable planning!