Estate Planning, Earth Day

I remember thousands gathering in parks across the nation on April 22, 1970 for the first Earth Day. We've made some progress in 40 years: air and water in America are cleaner and some species have been brought back from near-extinction. But the nuclear disaster in Japan, the Gulf oil spill and countless other issues remind us that much work remains.

Many of my clients strongly support environmental issues. That support dovetails nicely with their estate planning goals. For clients with substantial, highly appreciated assets, I sometimes recommend that they set up a Charitable Remainder Trust naming their favorite charity as the ultimate beneficiary. By putting highly appreciated assets in a Charitable Remainder Trust, the client gets an immediate income tax deduction, and avoids paying capital gains on the assets. This strategy also can reduce the size of the client's taxable estate and thus allow more tax-free money to pass to heirs. (The current federal estate tax exemption is $5 million. On Dec. 31, 2012, the exemption is scheduled to revert to its pre-2001 level of $1 million, unless Congress decides otherwise.)  Check out this page on wealth transfer strategies to see if a Charitable Remainder Trust has a place in your estate planning toolbox.