How Does State Law Affect Charitable Giving and Gift Planning?

Posted October 31st, 2016

A lot, a whole lot. Here are just some highlights: Pledges: Whether the donor’s executor must honor the donor’s pledge to the extent it remains unpaid at donor’s demise. Trustee’s obligation to provide information: Whether and to what extent the trustee of an outside-managed trust has a duty to provide information about the trust. Charitable …Read More

IRS Publication 526: “Charitable Contributions”

Posted October 5th, 2016

IRS issues publications on many tax topics. An especially valuable publication for charitable gift planners is Pub 526, “Charitable Contributions”. Pub 526 is updated each year, so if you download it, try to get the most recent version. Like all IRS publications, Pub 526 technically cannot be relied upon, in the sense that IRS is …Read More

Can Assets in a Trust Be Used to Make a Charitable Gift?

Posted September 20th, 2016

This question arises all the time. How do we think about it? The starting point is the trustee of the trust. The trustee holds legal title to all trust assets. That is, holds legal title for local law purposes. If the trust is revocable by its creator, the creator is deemed to own all the …Read More

Let’s Look at the 1974 Jordan Case from Florida

Posted September 8th, 2016

In the shadow of the press surrounding Duke University’s recent suit against a donor’s estate (and subsequently dropping of said suit), we’ll look at another case that bears resemblance and how the courts ruled on it. The 1974 Jordan Case is an important state court case on the enforceability of pledges. It arose because an individual …Read More

The Importance of Proper Gift Receipts

Posted August 22nd, 2016

Let’s take a look at the Durden Case, which case involves $25,171 in cash contributions made by the Durdens to their church in 2007. This is a Tax Court case. The Durdens went to court because the IRS threw out their claimed charitable deduction for these gifts. Let’s be clear. There was no dispute over …Read More

Let’s Spend Time With Lead Trusts – Pt 6

Posted August 9th, 2016

Last time, we saw that there is the “plain vanilla” CLAT, for which the donor gets a gift tax charitable deduction but not an income tax charitable deduction. We also saw that it’s possible to set up a CLAT so that the donor does get an up-front income tax charitable deduction in addition to a …Read More

Let’s Spend Time With Lead Trusts – Pt 5

Posted July 18th, 2016

Last time, we looked at a Charitable Lead Annuity Trust example. An example of a 12-year CLAT funded with $1 million of cash, which is to pay $50,000 a year (a 5-percent payout) to charity and then distribute its assets to Donor’s daughter. Question: How much will the daughter receive? No one knows for sure. …Read More

Let’s Spend Time With Lead Trusts – Pt 4

Posted July 8th, 2016

It’s now time for a CLAT example, to see how this thing works. Let’s suppose Donor creates a CLAT with $1 million in cash. The CLAT is to pay $50,000 a year to Charity for 12 years and then distribute all of its assets to Donor’s daughter, Sue. This fact pattern is as plain vanilla …Read More

Let’s Spend Time With Lead Trusts – Pt 3

Posted June 21st, 2016

Last time, we drilled down into the charitable lead annuity trust (CLAT). We saw that the CLAT may be set up to run for either a fixed term of years or an individual’s life (subject to restrictions); the CLAT is used not only to fund a charitable project but also to transfer substantial assets downstream; …Read More

Let’s Spend Time With Lead Trusts – Pt 2

Posted May 31st, 2016

Time to take a closer look at the charitable lead annuity trust (CLAT). The CLAT comes in several flavors; we’re going to start with plain vanilla. The plain vanilla CLAT makes a fixed payout to charity at least annually (e.g., $25,000 a year) for a term prescribed by the donor and then, typically, distributes its …Read More