A Possible Solution For a Gift and Estate Tax Deduction

As I have previously discussed, originally, the American Taxpayer Relief Act (ATRA) had frightened a group of estate planners into thinking that there would be fewer clients looking for estate planning advisors if the act was passed. However, since the ATRA has been passed, it has had the opposite effect on estate planning services.

Since the act, donors that make large contributions have realized that they are ATRA’s focus.The state exemption is $5.25 million with a 40% estate tax for anything over the exemption. A possible solution for major donors is to set up a charitable lead trust. The gift tax deduction for lead trusts is the equivalet to the current worth of the income to charity. Lead trusts paying between 4-6% offer a large tax deduction. The deduction can range from 60-100%.

See  What Do Major Donors Want? , Utchinson Research Center, Jul. 28, 2013.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.