Estate tax minimization
Create a Legacy through Giving
Our clients turn to us when they want to create legacy plans to benefit the non-profit organizations most important to them. Many of our clients want to see their capital allocated to social causes that improve the collective well-being of their communities, specifically in Tampa. Our team can help you allocate funds to the causes of your choice and show you strategies that can work to lower your overall tax burden.
Over the course of our lives, we all develop different views of the world. In many cases, we choose to give back to the great institutions of art, sciences, government, and education that gave us so much throughout our lifetime. Whatever it is, we’ll help you give something back to the communities that helped you to flourish.
Presently, the tax code offers incentives for gifting one’s assets or incomes. Tax deductions are given for current contributions and, for estate owners, charitable gifts can reduce the size of the estate to help minimize estate taxes.
Oftentimes, an individual will designate a charitable beneficiary in their will to benefit the organization after the individual dies. By using charitable gifting techniques, a donor may be able to benefit the charity while living without having to sacrifice the income that an asset can generate. Understanding how properly structured charitable gifts can provide current benefits for both the donor and the charity could be important for the charitably inclined.
Charitable Remainder Trust
A remainder trust enables the donor to transfer an asset while retaining the right to the income it generates. The asset becomes the “remainder” which is owned by the charity. Remainder trusts, if properly structured, can qualify for a current tax deduction. For Tampa residents committed to estate tax minimization, this combination of an immediate charitable income tax deduction, potential reduction in future estate taxes, and a predictable income stream can be a powerful way to support causes you care about in the Tampa Bay area while still meeting your long-term financial needs. We often illustrate how different payout rates, terms, and asset choices could affect your income, your heirs’ future inheritance, and the ultimate charitable gift so you can choose a remainder trust strategy that aligns with both your philanthropic goals and your estate tax planning priorities. There are three types of remainder trusts:
Unitrust: A unitrust the income the donor receives is based on a percentage of the current fair market valuation of a trust asset. Each year, as the asset is valued, the income is adjusted based on the new valuation.
Annuity Trust: Instead of a percentage of the asset value, the donor is paid a fixed amount annually.
Pooled Income Fund: Donors can pool their donated assets in a fund that is operated by a charitable organization. The donors then receive a proportionate share of income from the fund that is paid throughout their lifetime. Payments can vary each year based on the valuation of the underlying assets in the fund.
Charitable Lead Trust
Also known as an Income Trust this vehicle transfers the income rights to the charitable organization. In many estate tax minimization strategies, a properly structured lead trust is used to provide a predictable stream of support for a Tampa‑area charity for a set number of years, after which the remaining assets may pass to children, grandchildren, or even back to you, depending on the type of trust and your goals. For families focused on estate tax minimization in Tampa, a lead trust can allow substantial annual support for a favorite charity, museum, or foundation in the region while ultimately passing the remaining assets to children or grandchildren at a potentially reduced transfer tax cost. Generally, the income rights are assigned for a specified period of time after which the remainder passes to the donor.
Charitable planning involves tax issues that should be discussed with a qualified tax professional.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial, giving you the ability to implement sophisticated estate tax minimization strategies with the support of experienced trust professionals who understand how to coordinate your investment, retirement, and estate plans into one cohesive strategy. When appropriate, we can collaborate with your Tampa estate tax attorney and CPA to review existing documents, model different estate tax outcomes, and update your plan as laws change so your estate tax minimization strategy remains current, compliant, and aligned with your long‑term family and charitable objectives..
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