Charitable Strategies for Trust Beneficiaries

Sharon L. Klein (Senior Vice President, Trust Counsel and Director of Estate Advisement, Fiduciary Trust Company International, New York, New York) and Henry S. Ziegler (Former Senior Vice President and Special Advisor for Global Estate Planning, Fiduciary Trust Company International, New York, New York) have recently published their article entitled Charitable Strategies for Trust Beneficiaries.

Here is an excerpt from the article’s introduction:

Certain trusts permit distributions to be made to trust beneficiaries at the discretion of the trustee. There are benefits to making these distributions in the form of appreciated property—also called a distribution in kind. A distribution in kind is a distribution of property (for example, shares of stock), rather than cash, from a trust. The technique of distributing appreciated property bears investigating for the potential advantages to trust beneficiaries and charitable organizations that receive gifts from trust distributions. When a trustee distributes appreciated property to a beneficiary, the trustee can determine the capital gains treatment of the distribution. The trustee does this in accordance with an election granted under Section 643(e)(3) of the Internal Revenue Code, commonly referred to as the 643(e) election.