Charitable Planning

Austin Texas Estate Planning

At Texas Trust Law, we encourage and assist the tradition of giving to charitable causes. In addition to the many personal rewards inherent in making a charitable gift, most gifts also provide a current charitable income tax deduction. Some charitable giving strategies also save capital gains taxes, increase income, and provide you, or whomever you designate, with an income for life. Additionally, these types of gifts may provide an estate tax deduction — an important consideration in planning your estate.

Charitable Planning may be the most rewarding undertaking of your life. Everyone is aware of the needs that go unaddressed in our society and the world daily. You may want to benefit the homeless, support research into medical cures or create a scholarship fund at your alma mater. Regardless of what you want to do, HOW you do it can have a profound impact on your family and your taxes!

There are many ways to benefit charities. Charitable trusts are often recommended. A charitable remainder trust, for instance, can allow you to avoid the immediate payment of capital gains taxes on the sale of stock, real estate or other property — and you will receive a current income tax deduction you can use to offset other taxes. Other trusts can eliminate taxes on even the largest estate at the time of your death and allow your loved ones to inherit all of your property. The use of a private Family Foundations also is a popular choice to allow your charitable desires to continue far into the future, and provide a mechanism for your loved ones to manage that portion of your estate for the charitable purposes you have specified. There are a number of other approaches to accomplish whatever your goals may be.

Charitable planning can be exciting and rewarding for you and your family. We will look forward to explaining the vast array of options, and helping you design what works best for you and the causes you care the most about.

Making the Most of Your Charitable Giving in Texas

If given the choice between paying taxes (involuntary philanthropy), or making a charitable gift (voluntary philanthropy), most people would choose the latter, because it gives them the benefit of knowing who the money will benefit and how it will be used. The same cannot be said for money paid to the U.S. Treasury. We help clients make charitable gifts and practice good stewardship in the most tax-efficient manner.

There are many different ways to make charitable gifts:

  • A charitable remainder trust or a charitable gift annuity will give you an immediate income tax deduction, a lifetime stream of income, and a waiver of capital gains taxes owed on contributed property.
  • A charitable lead trust creates an income stream to charity for a term of years with the remainder of the trust going to your children without any estate or gift tax consequences.
  • A private foundation offers you the considerable freedom to control amounts given by placing restrictions on how your gifts are used by charities.
  • A donor advised fund allows you to maximize your income tax savings on your regular monthly or weekly contributions to church or charities.

This has been a very general overview of a very complex subject matter. If there are causes or organizations you would like to support, while also maximizing your tax-saving strategies, please contact us to explore your options.