Giving Gifts to Cut Taxes

People who have donated to charities with little thought in past years are likely to examine things more closely this year before donating. For those who want to see that their money is efficiently used, one of the following approaches may be better than simply writing a check:

•  
  •  
    • Set up a donor-advised fund. The donor deposits a large sum in the fund, cementing the tax deduction for the year. The donor can then request that the funds be donated to multiple charities for months or years.
    • Set up a charitable lead trust. The donor deposits a large sum in the trust and gets a tax deduction. The money is given to charities for years, after which the remainder goes to heirs.
    • Set up a family foundation. Family foundations give family members a specified amount of money for philanthropy work yearly. Some wealthy families like this approach because it can unite families.

See Gail MarksJarvis, Give a Gift and Cut Your Taxes, Chicago Tribune, Nov. 25, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.