First of all, let me wish you and your family a terrific Thanksgiving.
It truly is a season for giving, thanks for all our abundance, and enjoying family and friends.
From a financial perspective, this is the time of the year that we all think about contributing to 501c(3) charities with the benefit, for many of us, to receive a tax deduction. You won’t run out of options and choices, from local charities to national charities, and even your own charity.
For example, I have created www.abrighterday.info to help teens and parents with stress and depression with the goal of stopping teen suicide. (Apologies for the shameless plug here.) All charities will take your cash in the current season and, again for many, it’s a dollar-for-dollar tax deduction.
Here are a few interesting alternative ways to contribute to a charity.
- Create a Charitable Annuity. Most of these are done with actual annuities but are not required. Simply said, the Required Minimum Distribution (RMD) would go directly to your favorite charities.
- Use a Buffered Annuity. This works for income protection, taking the annual earnings and donating that to the charity of your choice.
- Use a Fixed Annuity. There are now fixed annuities that pay upwards and above 5% of annual income. You can donate this income and walk away in five years with no loss of principal.
- Create a Trust using Index Life Insurance where the death benefit would go to a charity, thereby leveraging your tax-deductible contribution. Many national charities and religious organizations love this program and may even name a building or program after you.
- Donate Income-Producing Real Estate to the charity. You can set this up for the charity to receive the income only during your life and your family ultimately receives back the real estate. Alternatively, the charity receives the real estate at the end and you have your family enjoy the income for a certain period of years. These can be part of Charitable Lead Trusts or Charitable Remainder Trusts.
- Use Donor-Advised Funds. Many companies offer these products where you would receive the 100% donation this year but can send these dollars to the actual charities at your convenience and in the future.
- Create a Personal Foundation. Lots of rules here, but this truly can create an incredible legacy for your family and your children.
- Use Life Insurance to have the Family Foundation receive the death benefit, leveraging your premium, thereby creating an incredible legacy.
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]As you can see, there are many ways to change the lives of your family and positively impact your favorite charities. Wouldn’t it be great to set up your next generation as one of “those” philanthropic families invited to “those” special dinners and engagements that we see pictures of in magazines?