Philanthropic Planning

Henderson Wealth Partners can help you create a wealth transfer strategy that supports your philanthropic and legacy goals while allowing you to enjoy the personal and financial benefits of giving. The following is a list of commonly-used strategies for making gifts to charity:

A charitable remainder trust is an irrevocable trust with both income and remainder interests. Income is paid to designated beneficiaries for a term or lifetime. The remainder interest is paid to qualified organizations as specified in the trust document when the trust terminates.

In a charitable lead trust, the trust pays a fixed percentage of assets to a qualified charity for either a set number of years or for the life or lives of the individuals. When the amount of the trust has ended, the remaining assets are distributed to the donor or heirs as noted in the terms of the trust.

Donor-advised funds are charitable giving accounts offering an accessible, simple, and less expensive alternative to establishing a private foundation. Donors contribute tax-deductible assets to their accounts and decide when and which charitable organizations will receive gifts or grants, and the amount of the gifts over time. The sponsoring organization, usually a financial services provider, does the record keeping and due diligence and, unlike private foundations, can protect a donor's identity if requested.

An irrevocable life insurance trust (ILIT) is typically used to shelter an insurance death benefit from estate taxes and may provide liquidity to pay estate taxes and settlement costs. A trust is created and then the trust purchases and owns a life insurance policy. Upon death the insurance proceeds are paid out in accordance with the terms of the trust.

A private foundation is a legal entity set up by an individual, a family or a group of individuals for philanthropic purposes. Unlike a charitable foundation, a private foundation does not generally solicit funds from the public.

A supporting organization is a charity that carries out its exempt purposes by supporting other exempt organizations, usually other public charities. This classification is important because it is one means by which a charity can avoid classification as a private foundation, a status that is subject to a more restrictive regulatory regime.

The right to the use and enjoyment of certain property (usually real estate) for life only. Someone who inherits a life estate in a house may live in the house for his or her life but has no right to sell it or to confer it at death. For example, a man in his second marriage might leave a life estate in his house to his surviving wife, with the provision that at her death, it is to go to his children from his previous marriage.

As an alternative method for donating to a charity, certain taxpayers may transfer funds from their IRA to an eligible charitable organization. To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity and meet specific IRS guidelines.

Philanthropic planning allows you to increase your impact on your favorite charities or causes. When you create a trust or plan your charitable donations, you maximize the financial impact of your giving. Set up correctly, your philanthropic planning can support charities for many decades in the future versus making a one-time donation. And since it can help you save money on taxes, it frees you up to give even more.

We can help you increase the impact of your charitable giving by using philanthropic planning. This can involve setting up a trust or a private foundation to manage your assets and distribute interest and income to your causes. Make an appointment with our team of financial advisors to find out how you can set up your assets to support important charities and causes.

Philanthropic planning allows you to give more to your favorite causes or charities. When you set up assets and investments to benefit nonprofit organizations, the organizations can receive long-term financial support. This frees them from having to manage the assets themselves and allows them to focus on their charity efforts instead.