The husband could make lifetime transfers of half of his estate to ensure that both his credit and his wife's credit would be utilized. With a Reverse QTIP Trust, the donor spouse transfers into the trust a certain amount of assets up to the donee spouse's credit exemption. At the second death, the remainder is transferred to the couple's respective heirs. If those heirs happen to be a qualified charity, the surviving spouse's estate would be entitled to a charitable deduction for the value of the property that is transferred to the charity. Lifetime charitable giving is yet another estate planning avenue that is used to maximize tax savings, while at the same time affording the donor the opportunity to satisfy philanthropic pursuits.
Charitable gifts made during one's lifetime provide a dual tax advantage.
First, a lifetime gift to a qualified charity creates an income tax deduction for the donor. Charitable giving can also be carried out through a remainder trust . Upon the donor's death, the property passes directly to the qualified charity. After the charitable remainder trust agreement is signed, the donor earns an income tax deduction at the time the property is transferred into the trust. With respect to family business succession planning, our trust and estate department works closely with our corporate and tax departments in order to fully advise clients on all aspects of this important matter.