Should You Dive Into a Pooled Charitable Trust?

7:58 am Uncategorized

A common misconception that continues to persist is that trusts are only for the wealthy.  However, with a pooled charitable trust, you can receive tax benefits through a donation of as little as $5,000.

Many charities and investment companies set up pooled charitable trusts to enable them to accept donations from many sources and of varied amounts.  They then “pool” these contributions into one investment fund, with dividends paid to each donor according to their contribution and the earnings from the fund.

While most pooled charitable trusts do have minimum threshold limits for the first donation, you can often make subsequent donations in as little as $1,000 increments via cash or investment instruments such as stocks and bonds.

And whenever you make a donation to the pooled charitable trust, you are allowed to take a deduction on your income tax.  If your donation has been made via an investment vehicle like stock or bonds, donating to a pooled charitable trust provides you with income without having to pay capital gains taxes.  And if the stocks or bonds you donated to the trust have been owned by you for more than a year, the charity will also be exempt from capital gains taxes.

While the income from the pooled charitable trust will be counted as regular income, you can ask that those earnings be retained by the trust until you reach a certain age.  The charity then receives your donation without probate following your death.

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