Planned giving seems vastly complex and intimidating. It can involve charitable remainder trusts, charitable lead trusts, family foundations, charitable gift annuities, business entities, income tax, capital gains tax, gift tax, estate tax, and more.
However, there is an underlying simplicity to all planned giving. Gift planning does two things: (1) it reduces the grantors’ taxes; (2) it empowers grantor to trade gifts for income.
Most of the complexity in planned giving comes from tax law because the IRS tightly regulates gifting strategies that lower taxes. The complexity involved in trading a gift for income is in fact an opportunity for the donor. It comes from the many options available for the donor to provide a future stream of income in exchange for the donation.