Giving to charity via a trust is not only for the wealthy; you can get the emotional and tax benefits of donating just a few thousand dollars by participating in a pooled charitable trust.
There are many California charities or investment companies that have set up a pooled charitable trust, enabling them to receive donations from a number of different sources, and in various amounts. These donations are then pooled into one investment fund, which pays dividends to each donor depending on their contribution and fund earnings.
With pooled charitable trusts, there is usually a minimum threshold limit for your first donation, but once that is made, you can give subsequent amounts in smaller increments – sometimes as little as $1,000. These gifts can be made in cash or stocks, bonds and other investments assets.
There are gifts in this strategy for you as well. Donations to pooled charitable trusts are deductible. If you donate investment assets, the trust will provide you with an income and you will not have to pay any capital gains tax on those assets. If you have owned the investments you donated for over a year, the charity will be exempt from capital gains taxes as well.
The income you receive from a pooled charitable trust will still have to be reported, but you can specify that the trust retain your earnings until you reach a predetermined age. After you die, the charity keeps your donation without probate.
Based in Irvine, the Flanigan Law Group is a California estate planning, administration and litigation legal services law firm. For more information on trusts, contact the Flanigan Law Group at 949-450-0041.