PLANNED GIVING, by Attorney Brian F. Mahoney

Many of you reading this article are fortunate and kind enough to give to charities of your choice, be it gifts to a re-hab hospital that gave you or a relative great care; to your synagogue or church; to medical research or for children in need. Whatever your preference, doesn't it make you feel good to know that every donation we can make, be it large or small helps.

Giving can also save you, as a charitable donor, on income, capital gains, gift and / or estate taxes.

As an Estate Planning Lawyer, my clients often ask me how to give to charity in their Wills. Initially my response is: 'If you have the money and the desire, consider giving now, during life, so you can see the fruits of your gifts and maybe go to the charity itself to visit or attend their fundraising dinner or activities and make new friends.'

Checks can be written and mailed or direct deposits can be sent from your account to your charity's account without lifting a pen or affixing a stamp.

If your Whole Life Insurance policy is paid up and you have sufficient assets to leave to your family, then perhaps your charity could be named as the beneficiary in either the primary or secondary position, and you avoid Probate.

If you are blessed with wealth; have worked hard and saved or have had great financial success you might be able to give and save on taxes. Often Clients need to lower their potential taxable Estate and there are many ways to do so. An Irrevocable Life Insurance Trust (ILIT) could be established which takes the life insurance out of a donor's estate thereby potentially saving thousands in estate taxes. Any investments or retirement funds, such as a Mutual Fund or an IRA that have a Beneficiary Clause can be used to name a charity as a primary or secondary beneficiary. This also avoids Probate.

A Trust can be established which leaves gifts to charity during your lifetime or after you pass away or both, whichever is your preference. The Trust could make annual gifts to your charity while providing investment income earned from the trust fund to you, or vice versa. Basically a Trust can make payments in any manner, or amount that you chose.

A Life Estate allows one to live, use and enjoy their realty for life and then upon death the property goes to whoever is named as the so-called remainder man. The remainder interest could be a charity appointed by you in your Will, in the deed itself or in an Appointment filed by you with the applicable Registry of Deeds.

A Charitable Lead Trust (CLT) pays income to a charity over a set period of time and then the remainder reverts to the charitable donor or other named beneficiaries There are 3 types of CLT's and a CLT may allow the donor to reduce income, gift or estate taxes.

A Charitable Remainder Trust (CRT) is an irrevocable trust that makes charitable contributions at least annually and for up to 20 years or for the life of the named beneficiaries. The goal is to give to charity while retaining interest income from the property for the donor or their named beneficiaries. The CRT can result in an income, gift or estate tax deduction.

A further benefit from utilizing trusts, beneficiary clauses or a life estate is that no Probate is required to make these gifts.

Where possible I advise Clients to avoid Probate Court because:

1. It saves the Estate legal fees and court costs.


2. Avoiding Probate eliminates a requirement to notify the Government of the Probate filing. They like to know when a person has passed in order to place a Lien against the estate if they have paid medical or nursing home benefits, or if back taxes are owed.


3. Avoid the cost and hassle of obtaining a license to sell realty, which could delay or make more costly a sale of realty.


4. Publication in the newspaper of the death is avoided and thus we avoid notifying potential alleged Creditors.


5. Estate plans can allow property to pass privately by deed or through Trusts which are not public records.


6. When property passes privately through Trusts, Creditors will not be notified and it passes without undue delay or subject to Court approval. This also cuts down the likelihood of a "contest," by a disgruntled heir since they have no right to even see "private documents," such as a Trust whereas a Court filing is public record.


7. Avoiding Probate eliminates Court rules and delays and reporting requirements that take time and money.