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Providing for Our Children's Future

Providing for Our Children's Future
Tamar and Irwin live in a small city within the Network of Independent Communities. For many years they worked to build up their nest egg for retirement. While they felt their savings and investments would cover their own needs, they wanted to make sure that their three children were provided for in the future. One afternoon, a gift planner from The Jewish Federations of North America (JFNA) met with them to thank them for their faithful gifts each year. The conversation turned to the couple's long-term planning goals.

Tamar: We wanted to continue making annual gifts to charity. Yet at the same time, I was concerned about sacrificing our children's inheritance.

Irwin: Our stock portfolio had appreciated significantly over the years. I wanted to pass these gains on to my family without paying a lot in gift or estate tax.

The gift planner told them about a way in which they could achieve their personal and charitable goals through a charitable lead trust. The trust would pay income to JFNA for a number of years. Then the full trust value, plus any growth, would go to their children. The plan would allow them to pass on substantial wealth to their family at little or no gift tax at all. It would also reduce the size of their estate in addition to helping JFNA further its life-saving work.

Tamar: I could see how this plan would be very helpful if the trust were funded with our stock. Each of our children would receive one-third of the trust assets in the future. We would continue to make Annual Campaign gifts to JFNA each year during the term of the trust, but the distributions from the trust would accumulate in a named Perpetual Annual Campaign Endowment (PACE) fund at JFNA. After the trust terminates, the PACE fund would make annual distributions to JFNA's Annual Campaign, with credit to our Network community.

Irwin: I also thought the plan was a good one. It would give our children time to learn how to save and invest their future inheritance. So we set up a charitable lead trust plan that would begin paying JFNA income each year. The prospect of helping our children succeed in the future while providing for our favorite charity made us pleased with our decision.

*Please note: The names and image above are representative of typical donors and may or may not be actual donors to JFNA, a Jewish Federation or a Jewish Community Foundation.

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Any tax consequences described on this page are based on U.S. federal tax law. Charitable deductions from state and local taxes or from Canadian and provincial taxes may not be available to the same extent as from U.S. federal taxes. The Jewish Federations of North America (JFNA) does not provide legal advice. Donors are encouraged to seek independent tax and legal counsel. You may read JFNA's charitable solicitation disclosure statement here and important information about endowment gifts and bequests to JFNA here.