Philanthropic Initiatives

Spectrum Financial can help you create a wealth transfer strategy that supports your philanthropic goals and objectives while allowing you to enjoy the personal and financial benefits of giving. The following is a list of commonly-used strategies for making gifts to charity:

Donations to IRS eligible non profits can be made with RMD dollars and subsequently avoid being classified as taxable income. This strategy allows the gifting household to full benefit of the contribution regardless of itemizing taxes or not.

A charitable remainder trust is an irrevocable trust with both income and remainder interests. Income is paid to designated beneficiaries for a term or lifetime. The remainder interest is paid to qualified organizations as specified in the trust document when the trust terminates.

In a charitable lead trust, the trust pays a fixed percentage of assets to a qualified charity for either a set number of years or for the life or lives of the individuals. When the amount of the trust has ended, the remaining assets are distributed to the donor or heirs as noted in the terms of the trust.

Donor-advised funds are charitable giving accounts offering an accessible, simple, and less expensive alternative to establishing a private foundation. Donors contribute tax-deductible assets to their accounts and decide when and which charitable organizations will receive gifts or grants, and the amount of the gifts over time. The sponsoring organization, usually a financial services provider, does the record keeping and due diligence, and, unlike private foundations, can protect a donor's identity if requested.

An irrevocable life insurance trust (ILIT) is typically used to shelter an insurance death benefit from estate taxes and may provide liquidity to pay estate taxes and settlement costs. A trust is created, and then the trust purchases and owns a life insurance policy. Upon death, the insurance proceeds are paid out in accordance with the terms of the trust.

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* Note: Securities America does not provide tax or legal advice.