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PERSONAL PHILANTHROPY

Charitable trusts

As the name suggests, charitable trusts allow you to support the philanthropic causes you care about. But they can also offer you a range of additional benefits, such as providing you or your heirs with an income stream, minimizing gift taxes and deferring capital gains taxes.

Charitable lead trust (CLT)

CLTs let you maximize your charitable giving with annual gifts while ensuring a tax-advantaged way to transfer wealth to the next generation. So you can preserve more of your wealth for your heirs because you transfer property to them at a reduced value for gift tax purposes. When the trust expires, the assets return to the beneficiaries without being subject to gift or estate taxes. CLTs are useful when you want to:

 

  • Receive an immediate charitable income and gift tax deduction.
  • Minimize capital gains tax.
  • Benefit from tax-free gifting.

Charitable remainder trust (CRT)

With a CRT, you have the freedom to direct your wealth in ways that reflect your values and beliefs, while also receiving a payment stream during your lifetime. The CRT can provide income to you or your beneficiaries for a fixed term, or to last for a beneficiary’s lifetime. Best suited for assets with a low tax basis, CRTs can sell appreciated assets without triggering capital gains taxes, enabling it to reinvest the proceeds to generate income. Assets remaining in the trust when it terminates are distributed to your chosen charities. CRTs are useful when you want to:

 

  • Receive an immediate charitable income and gift tax deduction.
  • Minimize capital gains tax.
  • Receive potential tax advantages through the unlimited marital deduction.
  • Manage a concentrated stock position in a tax-efficient way.
  • Reduce the amount of your taxable estate.

Whatever your charitable goals, Bank of America Trust Services has the services and expertise to help you realize your vision while maximizing the advantages in your personal financial life.

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