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Image Outside the box: Legacy combinations you might overlook

As you’re developing estate plans for yourself or a charitable client, remember that the Community Foundation is happy to help structure a hybrid gift in which a personal component is paired with a charitable component.

For instance, the charitable remainder trust (“CRT”) is a popular tool because it allows you or your client to generate a lifetime (or term of years) income stream, with the remainder automatically flowing to a nonprofit organization.

Because the trust is irrevocable, an immediate income tax deduction is available for the present value of the future gift to charity. 

But the CRT is not necessarily the end of the story. Many charitably-minded families elect to name their fund at the Community Foundation as the remainder beneficiary of a charitable remainder trust, thus creating a lasting legacy. This is especially the case when the fund is established as an endowment to dynamically support the most pressing community needs at any given time, make ongoing annual grants from the fund’s income to specific organizations you or your client selects, or provide regular funding to causes to support in perpetuity.  

If you are learning about CRT for the first time, please do not hesitate to reach out to us for gift illustrations. We can easily run various gift scenarios for you and your clients to compare and contrast. 

Another example of a hybrid gift structure is a pet trust. A typical pet trust frequently does not qualify for a charitable deduction because funds are designated to support a one’s own pet. The Community Foundation, however, can work with a local animal shelter to create a bequest such that both the pet and the nonprofit organization are supported and you or your client’s estate is eligible for a tax deduction for the portion of the gift that benefits the nonprofit organization as a whole.

Whether you plan to give inside or outside the box, we’re here to support your charitable giving plans. Send us an email at at any time.

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