Planning for Change: Estate Reduction through Charitable Giving

Spotlight on Giving

The estate tax exemption doubled under the Tax Cuts and Jobs Act (TCJA) of 2017 and now sits at $13.99 million. However, this provision is scheduled to “sunset” at the end of this year. If Congress doesn’t act, the exemption amount will drop into the $7 million range. If your estate is over $6 million (or may reach that level by 2026), now is the time to start considering and implementing strategies to minimize the tax impact and leave more for your heirs—including charitable giving.

If you want to leave a philanthropic legacy, you can arrange a gift that supports our organization, removes assets from your estate (thereby potentially reducing the amount of estate tax you owe), and possibly provides current personal and tax benefits as well. Consider the following options:

A donor-advised fund (DAF). A DAF removes assets from your estate and puts them in a managed account. This qualifies for a current charitable income tax deduction, even though you can recommend grants to qualifying charities like ours at any point in the future. You may also be able to name us as the beneficiary of whatever remains in the DAF at the end of your life. Read more here.

A charitable trust. You can fund a charitable trust with $100,000 or more if you want a flexible way to make a significant charitable impact and simultaneously meet a variety of personal planning goals. Your gift qualifies for a federal income tax deduction if you itemize. 

• A charitable remainder trust provides an income for you and/or other beneficiaries (for life or for a period of up to 20 years), then passes what is left in the trust to us at the end of the payment period.

• A charitable lead trust is the opposite. It makes payments to us first, then distributes the remainder to named beneficiaries (typically family members) at the end of the payment period. This minimizes estate and inheritance taxes for the beneficiaries.

No matter your financial situation, charitable giving can be an important part of your estate plan, even if you are not impacted by the potential reduction in the estate tax exemption amount. We thank you for considering ways to make a significant and enduring impact on our work. We are always available to assist with your planning—reach out with questions or for more information.