Welcome to the Ainer & Fraker Family Philanthropy Library.
Each article has been written by one of our Family Philanthropy attorneys.
Click on the Article Title to read in full.
What in the World is a FLIP-CRUT?
Recently, I was working with a client to design a Charitable Remainder Trust to which he could donate his $3.2 million real property. During the meeting, he expressed his desire not to sell the property inside the Charitable Remainder Trust until the second or third year after contribution. At which point, I asked him: “Have… Continue Reading
Can you Use an Annuity to Fund a Charitable Remainder Trust?
One of the most common questions we get from financial advisors with regards to a Charitable Remainder Trust is: “Can we fund it with an annuity?” Listen as Trust and Estate Attorney John Erik Fraker addresses this question. Podcast: Download (1.3MB) | Embed… Continue Reading
Hedging a Charitable Remainder Trust with a Life Insurance Trust
So you’ve been patiently explaining all the benefits of a Charitable Remainder Trust to your clients. You’ve demonstrated how a CRT will save them money over an outright sale and immediate payment of taxes. You’ve successfully overcome the client’s objection that this is more than they planned on giving to charity when they die, by… Continue Reading
Charitable Remainder Trust vs. Sale and Taxes
When explaining the true benefits of a Charitable Remainder Trust to a client, it’s important to highlight the difference between contributing the asset to a CRT vs. selling the asset outright, and paying the taxes. Listen as Tax and Estate Attorney John Erik Fraker explains how to keep your clients focused on the real tax… Continue Reading
The Charitable Remainder Trust vs. The IRA
The Charitable Remainder Trust is one of the most powerful tax-planning vehicles available to your higher net worth clients. Like an Individual Retirement Account or 401(k), a Charitable Remainder Trust allows client assets to grow in a tax deferred environment, with taxes being paid on the income stream that goes to the client. However, that… Continue Reading
Benefits of the Charitable Remainder Trust – Estate Tax Elimination
The Charitable Remainder Trust is one of the most common tax planning techniques we use with clients here at Ainer & Fraker, LLP. Let’s look at one of the most compelling benefits of a Charitable Remainder Trust: the Estate Tax credit for amounts passing to Charity. While it seems obvious at first – assets passing… Continue Reading
Benefits of a Charitable Remainder Trust – Capital Gains Tax Deferral
The Charitable Remainder Trust is one of the most common tax planning techniques we use with clients here at Ainer & Fraker, LLP. Let’s look at one of the most compelling benefits of a Charitable Remainder Trust: deferral of Capital Gains Tax on appreciated amounts contributed to the CRT. The power of deferred capital gains… Continue Reading
Benefits of a Charitable Remainder Trust – Income Tax Deduction
The Charitable Remainder Trust is one of the most common tax planning techniques we use with clients here at Ainer & Fraker, LLP. Let’s look at one of the most compelling benefits of a Charitable Remainder Trust: the Income Tax Deduction for amounts passing to Charity. Although much of the discussion around Charitable Remainder Trusts… Continue Reading
Benefits of a Charitable Remainder Trust
The Charitable Remainder Trust is one of the most common tax planning techniques we use with clients here at Ainer & Fraker, LLP. In earlier posts, we talked about the Technical Requirements of a Charitable Remainder Trust, so now let’s look at three of the key benefits to the client of a Charitable Remainder Trust… Continue Reading
Technical Requirements of Private Foundations
We have discussed how Private Foundations have served as the cornerstone of American Philanthropy for generations. We also have taken a look at the characteristics of those Who Set Up Private Foundations. Now, let’s take a look at the legal and technical requirements of setting up and managing a Private Foundation. Interestingly enough, Section 509… Continue Reading
Who Creates Private Foundations?
For the past century, Private Foundations have served as the cornerstone of American Philanthropy, distributing hundreds of millions of dollars to worthy causes. But the question arises, who exactly sets up a Private Foundation? While it is impossible to come up with a one-size-fits-all generalization, certain characteristics are common to many, if not most, foundation… Continue Reading
Private Foundations
The Private Foundation has long been established as one of the most highly regarded cornerstones of American Philanthropy. From days of old, Private Foundations such as the Rockefeller Foundation, the Carnegie Foundation, and the Pew Charitable Trusts have shaped American life in invaluable ways. Modern-day incarnations include the J. Paul Getty Trust, the Bill and… Continue Reading
IRS Guidance on Type III Supporting Organizations
In our earlier posts, we discussed a specific charitable entity called the Type III Supporting Organization. We also examined the unique Advantages of a Type III Supporting Organization over a Private Foundation. One of the challenges in setting up a Type III Supporting Organization are the technical rules and requirements imposed by the Internal Revenue… Continue Reading
Advantages of the Type III Supporting Organization
In our prior post, we examined the extensive technical requirements to qualify as a Type III Supporting Organization. So why would any Donor willingly subject him or herself to complying with this barrage of compliance rules? The answer is simple: If a family charity qualifies for Supporting Organization status, then it will be classified in… Continue Reading
Type III Supporting Organization
A “Type III Supporting Organization” is an organization that is “operated in connection with” an IRS-approved supported organization. By virtue of its connection with the Supported Organization, the IRS treats the Type III Supporting Organization as a Public Charity. Therefore, a Type III is a Supporting Organization that often looks and feels like a Private… Continue Reading
The Supporting Organization
Ordinarily, charitable organizations have been classified by the IRS as either Private Foundations or as Public Charities. The difference in tax benefits, not to mention regulatory requirements and burdens, can be substantial. However, Internal Revenue Code Section 509(a)(3) has designated a third group of charitable entity – the Supporting Organization. For those entities fortunate enough… Continue Reading
The Charitable Lead Trust
The Charitable Lead Trust (CLT) is often thought of as the opposite of a Charitable Remainder Trust. Unlike a Charitable Remainder Trust, which pays an income stream to a non-charitable recipient during its term with the remainder going to charity, a Charitable Lead Trust pays an income stream to a qualified charity during its term,… Continue Reading
The Charitable Remainder Trust
The Charitable Remainder Trust (CRT) is one of the most popular charitable giving techniques available today. It’s popularity stems from the fact that it allow the Donor to make a Future Gift of property to a qualified Charitable Organization, while retaining the right to an income stream that the property produces during a set period… Continue Reading
The Life Estate Agreement
At the heart of the Life Estate technique is the Life Estate Agreement, which sets forth all of the governing provisions as required by law. The Life Estate Agreement sets forth all of the required provisions, including but not limited to: Whether the retained interest is for the life of the Donor, the life of… Continue Reading
Life Estates
The Life Estate is one of the most commonly overlooked charitable giving vehicles. Through a Life Estate, a Donor irrevocably transfers title in the Donor’s personal residence or farm to a qualified charitable organization, while retaining an interest in the property for a period of time that is specified in the Life Estate Agreement. Lifetime… Continue Reading
Tax Requirements of Charitable Giving
In addition to weighing out the Advantages and Disadvantages of Bequests and Outright Gifts, it is important to examine some of the legal and tax requirements imposed by the IRS and State taxing authorities: Organization Must Qualify to Receive Charitable Contributions – IRS Publication 526 provides guidance as to what kinds of organizations are eligible… Continue Reading
Disadvantages of Bequests and Outright Gifts
While giving directly to charity has its advantages, it’s definitely not for everyone. Here are some of the Disadvantages of Bequests and Outright Gifts: Lack of Donor Control over Donated Funds – For both bequests and outright gifts, it is the recipient charity who will be the primary decision-maker on how such funds are spent.… Continue Reading
Advantages of Bequests and Outright Gifts
Bequests and Outright Gifts are some of the most common means of charitable giving. Let’s examine some of the Advantages of giving directly to charity: Inexpensive and Easy to Accomplish – Let’s face it, it doesn’t get much cheaper or easier than simply opening up a checkbook and writing a large check to your favorite… Continue Reading
Bequests and Outright Gifts
Without question, the most common charitable giving technique is for a Donor (or his Executor) to simply write a check to a worthy charity of their choice. An outright gift of Cash, Stock, or Real or Personal Property is a simple, direct and effective way of benefiting both the Donor and the recipient organization. A… Continue Reading