Donors’ Charitable PledgesDonors’ Charitable Pledges
The ins and outs.
Warning: An arcane federal estate tax rule can be dangerous to your client’s wealth.
Suppose your client wants a charity to get a cash gift on their death. What’s the difference to the charity if it receives a bequest under your client’s will or living trust or receives the gift by a binding pledge signed during your client’s life and payable to the charity on their death? Assume no will contest. And forget about the possible different elapsed times after the client’s death before the charity receives the dough. For the charity, there’s no difference.
What’s the difference to your client’s estate, assuming it’s subject to the federal estate tax? In most cases, there’s no difference. But suppose your client’s estate includes a closely held...
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