When you are crafting your legacy it is possible that you may feel some philanthropic urges. If you are in a position to be able to provide something for worthy causes, you are of course giving something back, but at the same time you may be receiving some tax benefits.
One estate planning tool that is often recommended by inheritance planning lawyers to people who are looking for a vehicle of charitable giving that provides some tax efficiency would be the charitable remainder unitrust.
Once you fund the trust you must name a beneficiary who will receive annuity payments equal to between 5% and 50% of the trust’s value on an annual basis. You also set a term during which you will be receiving the payments, and it can be for the rest of your life. Most people who create such a trust act as their own non-charitable beneficiary.
You must name a charitable beneficiary as well. At the end of the trust term at least 10% of the contributions into the trust must remain, and this remainder goes to the charitable beneficiary.
The tax savings lie in the fact that you are moving assets out of your estate and into the trust and in so doing you are reducing the taxable value of your estate. The IRS also allows for a charitable deduction that is calculated based on some rather complicated regulations.
To learn more about charitable remainder unitrusts, simply take a moment to arrange for a consultation with a Hartford estate planning lawyer.
Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.
After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.
Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.
Mr. Horowitz was selected for Super Lawyers in 2021.
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