Gifts that Pass Assets to Heirs, Free of Estate and Gift Taxes:

Charitable Lead Trusts
For the donor who wants both to leave something to children and grandchildren, and to minimize the percentage taken by estate and generation-skipping transfer taxes, setting up a Charitable Lead Trust makes sense. A part of the estate is donated to the trust immediately, and the income goes to the fund in the Community Foundation for a designated number of years. The trust will reduce estate taxes and prevent property from being taxed to the donor's children. When the children's children reach maturity, the trust is terminated and the assets go for their benefit. The community benefits during all those in-between years, and the grandchildren receive much more than they would have otherwise.

Note: If you are a professional advisor and would like to receive further information or personalized illustrations on gift arrangements that can benefit your clients please contact Bob Chapla - Vice President Development or Chris McGuigan - President, Community Foundation for Muskegon County.

IRA/Retirement Plans
You have been putting away money for years in an IRA or other qualified retirement plan. If you are like a growing number of Americans, that IRA may be your largest single asset—a nest egg to leave behind for the children's future. But you may not realize the massive tax bite the plan is subject to once it is passed on to the beneficiaries. That legacy intended for your children could amount to just 20 cents on the dollar as a result of combined estate tax and income taxes on the IRA.

The Charitable IRA
Using an IRA for a direct charitable bequest can pay real dividends in the community. If you have already created a sound estate plan that achieves all objectives and takes care of the family, one lingering challenge remains: What should the you do with an IRA or qualified retirement plan? Leaving the children the IRA could result in a combined tax of up to 80%-and you have already provided well for both spouse and children through an existing estate plan-you may want to provide an incentive for the children to be involved in the community and participate in philanthropy. A good solution: Create a Charitable IRA by naming the Community Foundation for Muskegon County as the beneficiary of the IRA or qualified retirement plans. By making a charitable bequest of an IRA plan, you will avoid the double tax bite of estate and income taxes and create a permanent charitable legacy.

For example, donors who create a Donor Advised Fund for their children can help them learn philanthropy and carry on their families' tradition of generosity. And the children can take advantage of our philanthropic and grantmaking services to learn more about the charities serving our community. Alternatively, you could create a Field of Interest Fund, Scholarship Fund, or choose any other type of Fund in the Community Foundation that meets your charitable giving objectives.