Shrewsbury Charitable Planning and Private Foundations Lawyers
Estate planning is often thought of in terms of protecting loved ones, reducing taxes, and preserving assets for future generations. While those goals are central, for many families, there is another equally important objective: giving back. Charitable planning allows you to support the causes and organizations that matter to you while at the same time reaping financial and tax benefits. In some cases, clients wish to leave modest gifts to charities in their wills. Others are motivated to create structures that allow them to make a substantial and lasting impact, such as establishing a private foundation that involves their children and grandchildren in the work of philanthropy. Whatever your goals, charitable planning is a powerful tool for aligning your estate plan with your values.
At Sanvenero & Cittadino, LLC, we help individuals, families, and business owners in Central Jersey and the North Shore incorporate charitable giving into their broader estate and financial strategies. Our Shrewsbury charitable planning attorneys are here to provide practical guidance, creative planning, and carefully drafted documents that make your generosity count. With the right plan in place, your charitable vision can continue for generations.
The Role of Charitable Planning in Estate Planning
Many people are surprised to learn that charitable planning can accomplish more than simply directing funds to a cause. Properly structured, charitable giving can reduce income taxes, lower estate and gift tax exposure, and provide long-term financial benefits for both your heirs and the organizations you care about. It also allows you to exert more control over how your money is used. Instead of leaving your charitable gifts to chance or assuming family members will carry them out as you intended, you can set up legally enforceable structures that ensure your wishes are respected.
Equally important, charitable planning can be part of the legacy you leave to your family. By involving children or grandchildren in decision-making, you not only pass on wealth but also values. Many of our clients view charitable planning as a way to teach future generations about responsibility, community service, and the importance of stewardship.
Leading Tools for Charitable Planning in Shrewsbury
Charitable planning takes many forms, and the right choice depends on your goals, assets, and the level of control you want to maintain. Some clients prefer simple approaches, such as leaving a bequest in a will, while others choose more sophisticated strategies that provide both income during life and significant tax advantages.
One common tool is the charitable remainder trust (CRT). With this arrangement, you can place assets such as appreciated securities or real estate into the trust. The trust then provides you or your designated beneficiaries with income for a period of years or for life. When the trust ends, the remainder passes to the charity of your choice. This structure allows you to avoid capital gains taxes on the initial transfer, receive an income tax deduction, and still provide for your family.
Another powerful strategy is the charitable lead trust (CLT). In contrast to a CRT, a CLT provides income to a charity for a set number of years, after which the remaining assets go to your heirs. This approach can be highly effective for families who want to benefit a favorite organization now while also transferring assets to the next generation at a reduced tax cost.
For those who prefer flexibility, donor-advised funds (DAFs) are another popular option. A DAF allows you to make a contribution, take an immediate tax deduction, and then recommend grants to charities over time. Because the sponsoring organization handles the administrative work, DAFs are often easier to manage than private foundations, making them a good fit for individuals who want to give back without taking on the regulatory burdens of a more formal structure.
Even something as simple as a bequest in a will or trust can be a powerful way to support a cause. You may designate a specific amount of money, a percentage of your estate, or particular assets such as securities or real property to pass to the charity of your choice. Our attorneys can ensure that your bequests are worded in a way that is both clear and enforceable.
Establishing a Private Foundation
For clients who want to make a larger or more permanent commitment, a private foundation can provide a structured and lasting vehicle for charitable giving. A private foundation is typically established as a nonprofit corporation or trust that is funded by an individual or family. Unlike gifts to a single charity, a foundation gives you control over how funds are distributed and invested, and it allows you to support multiple organizations or even create your own charitable programs.
Private foundations are often appealing to families who want to involve multiple generations in philanthropy. Children and grandchildren can sit on the board, participate in decisions about grants, and continue the charitable mission long after the original donor has passed away. This not only ensures continuity but also fosters family unity around a shared purpose.
However, private foundations also come with significant responsibilities. They are subject to strict IRS regulations, including rules against self-dealing, limits on certain types of investments, and requirements to distribute a minimum percentage of assets each year. Foundations must also file detailed annual reports, maintain records of all grants, and comply with state and federal laws governing tax-exempt organizations.
At Sanvenero & Cittadino, LLC, we assist with every aspect of foundation planning and operation. We can help you draft the governing documents, obtain tax-exempt status, establish sound governance practices, and advise on compliance issues. For clients who already operate foundations, we provide ongoing counsel to ensure that regulatory requirements are met and that the foundation’s activities remain aligned with its mission.
Tax Considerations in Charitable Planning
One of the most significant benefits of charitable planning is the opportunity to reduce taxes. Charitable gifts made during your lifetime may qualify for income tax deductions, depending on the type of gift and the organization receiving it. Gifts made through your estate can reduce the size of your taxable estate, potentially lowering or eliminating estate taxes. By carefully structuring your plan, it is possible to achieve both philanthropic and financial objectives simultaneously.
For example, donating appreciated stock to a charitable remainder trust allows you to avoid capital gains taxes that would otherwise be due if you sold the stock outright. Similarly, directing retirement plan assets to a charity can be more tax-efficient than leaving them to individual beneficiaries, since charities do not pay income tax on the distributions.
Because the rules governing charitable deductions and exemptions are complex, it is essential to work with an attorney who understands both federal tax law and New Jersey’s specific requirements. Our firm helps clients identify the most tax-efficient giving strategies based on their assets and goals.
Creating a Legacy Through Charitable Giving
Beyond the financial and legal considerations, charitable planning is ultimately about making a difference. It allows you to support institutions that shaped your life, assist those in need, and ensure that your values continue to guide your family. Many clients find deep personal satisfaction in knowing that their estate plan will serve not only their heirs but also the broader community.
Our attorneys recognize that every family’s vision is different. Some wish to support religious institutions, others want to advance medical research, and still others are committed to local charities that strengthen the community. Whatever your priorities, we can design a plan that reflects your values and ensures that your generosity has the maximum impact.
Talk to a Shrewsbury Estate Planning Attorney About Charitable Planning
Whether you want to leave a bequest to a favorite charity, establish a charitable trust, or create a private foundation, Sanvenero & Cittadino, LLC can help. Our estate planning attorneys provide clear advice, customized strategies, and ongoing support so that your plan works exactly as you intend. By integrating charitable planning into your overall estate plan, we help you achieve both your personal and financial goals. Call our Shrewsbury office today to schedule a consultation.