Ask Terry Questions Charitable Trusts

Charitable Trusts

By Terry Savage on March 18, 2019 | Wild Card

A month or so ago I caught the end of your discussion on WGN radio at noon time. You were saying something about setting up a charitable trust so you could give to the trust in one year and itemize your deductions and the next take the standard deduction. Did I hear right? If so how do you set up such a trust? Is it complicated that you need a lawyer or simple like setting up a IRA?

Terry Says

That wasn’t me – re your question about tax planning using charitable trusts. But I’m guessing that someone advised using a Charitable Gift Fund (as offered by Fidelity and Vanguard, and others) to make a very large gift in one year – and itemize, taking that as a tax deduction.  Then in the future, money can be directed from the charitable gift fund to designated charities in your name.  Then in future years you won’t get the deductions for these distributions – but you will get the good feeling.  And you will benefit by not having enough deductions to itemize, so you would take the standard deduction and save on tax prep costs!

It’s easy to set up a charitable gift account and no costs involved.  Here’s a link to the Fidelity Charitable Gift Trust program.



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