On behalf of the CFT Professional Seminar Committee, special thanks to our sponsors and to each of you who attended the May 7th CFT/SMU Professional Seminar at SMU!
Speaker Professor Samuel A. Donaldson brought humor and planning wisdom to the 3-hour continuing education program Staying Atop Shifting Sands: Keeping Nimble Amidst Changing Tax Laws.
Donaldson, a faculty member at Georgia State Law, engaged a full house with practical tips for planning for married couples with varying estate sizes and with strategies for anticipating state transfer taxes and appropriate trust tools. He provided a thorough overview of post-enactment guidance for the Tax Cuts and Job Act of 2017, along with 2019 notes of interest for estate planning professionals.
In his concluding slides for contemporary tax strategies, Donaldson explained that donors can maximize deductions through charitable giving by “bunching” donations to a donor-advised fund. He noted that charitably-minded donors over the age of 70 ½ can direct their IRA custodians to pay the required minimum distributions to a specified charity. Donors would not receive a deduction for a charitable rollover gift, however, they would benefit from not adding to their taxable income. Said Donaldson, “Charitable rollovers are even better under the new law, now that the limit on the deduction for cash contributions has been increased.”
Please contact Kathryn McGill at firstname.lastname@example.org to learn more about how donors can utilize their charitable rollover distributions to benefit their philanthropic goals through a CFT fund.
In a recent conversation with Advisory Council Member, Phil Lindquist, we asked which planning tools he was finding useful for his clients right now. Phil responded “The Charitable Lead Trust (CLT) has now been in the tax planner’s toolbox for 50 years, but CLTs have fallen to the bottom of the toolbox with other nearly forgotten tools.
However, in this low-interest rate environment, for the right client, it is time to consider the utility of the CLT anew. For clients whose use of the individual charitable income tax deduction under section 170 is limited under the current tax law, a CLT that is not a grantor trust offers the opportunity to offset trust income with the trust income tax charitable deduction found in section 642(c)(1), and that deduction was not limited by the changes made in 2017. This means that a CLT may provide income tax benefits, regardless of whether it provides transfer tax planning benefits.”
How does a charitable lead trust work?
The grantor, or person establishing the charitable lead trust, makes a contribution to fund the trust which is set up to operate for a fixed term such as a set number of years or the life of one or more people.
Payments from the trust are disbursed to the selected charity or charities as either a fixed annuity payment or a percentage of the trust, depending on how the trust has been structured.
At the end of the term, the remaining assets are distributed to non-charitable beneficiaries, often family members.
What are the benefits of using a CLT with a donor-advised fund?
Depending on the type of charitable lead trust established, changing charitable beneficiaries may be difficult or not permitted. Donors may wish to retain a greater level of flexibility without having to amend the trust in the event of a desired change in charitable organizations. Establishing a CFT donor-advised fund that allows flexibility in naming charitable organizations is a way to support multiple charitable organizations that you or your clients care about. Questions? Contact Geri Jacobs at email@example.com, or visit the Advisors section on our website.
May 23, 2019: North Texas Giving Day Registration Opens
North Texas Giving Day registration opens tomorrow! You can get involved right now by reaching out to your favorite nonprofit to make sure it takes part in the most exciting day in North Texas! (Feel free to use our customizable nonprofit outreach email here). Additionally, your favorite nonprofit staff or volunteers can attend kickoff events happening across North Texas to gain valuable information and resources to make this year’s North Texas Giving Day a success! Kickoffs begin tomorrow. Check out the kickoffs page to learn more.
May 12, 2020: Professional Seminar Featuring: Jeff Bush
The Washington Update
If you would like more information about how CFT can help you help your clients or about any of our upcoming advisor events please contact: