The holiday season naturally draws our attention to what matters most, family, gratitude, and giving back. For many of us, it’s also a time of reflection on the legacy we want to leave behind. At Meurer & Potter Law Office in Denver, we’ve spent more than three decades helping families turn those reflections into meaningful action through charitable trusts and legacy planning. Whether you’re considering a charitable remainder trust or simply want to explore how giving can become part of your estate plan, the holidays offer a unique window to make lasting decisions that benefit both your loved ones and the causes you care about.
Why the Holidays Are the Perfect Time for Legacy Planning
There’s something about the end of the year that prompts us to think bigger. Maybe it’s gathering around the table with multiple generations, or watching grandchildren open gifts, or simply taking stock of another year passed. Whatever the catalyst, the holidays create space for conversations that don’t always happen during the rest of the year.
From a practical standpoint, year-end planning also carries financial advantages. Charitable contributions made before December 31st can reduce your taxable income for the current year. But beyond the tax calendar, there’s an emotional component that shouldn’t be overlooked. Discussing legacy planning during the holidays, when family is already together, can feel more natural than scheduling a formal meeting.
We’ve seen this firsthand at our Denver and Greenwood Village offices. Clients often reach out in November and December after holiday gatherings spark important conversations about inheritance, charitable giving, and family values. These discussions don’t have to be uncomfortable. In fact, when framed around giving back, they often bring families closer together.
Understanding Charitable Trusts and How They Work
A charitable trust is a legal arrangement that allows you to support a nonprofit organization while also providing benefits to you or your beneficiaries. Think of it as a way to do well while doing good, you can receive income, reduce taxes, and leave a meaningful gift to a cause that matters to you.
Charitable trusts are irrevocable, meaning once assets are transferred in, they generally can’t be taken back. This permanence is part of what makes them so effective for tax planning. The IRS recognizes your commitment to charitable giving and rewards it accordingly.
At Meurer & Potter, P.C., we help clients throughout the Denver metro area understand which type of charitable trust fits their specific situation. Our approach starts with listening, understanding your family, your financial goals, and how you’d like to impact the organizations and people you care about.
Charitable Remainder Trusts vs. Charitable Lead Trusts
The two most common types of charitable trusts work in opposite directions, and understanding the difference is essential.
A Charitable Remainder Trust (CRT) pays income to you or your designated beneficiaries for a set period or for life. After that period ends, the remaining assets go to your chosen charity. This structure works well for individuals who want ongoing income, perhaps during retirement, while knowing their assets will eventually support a cause they believe in.
A Charitable Lead Trust (CLT) flips the arrangement. The charity receives income payments first, for a specified term. After that period, the remaining assets pass to your heirs, often with significantly reduced gift or estate taxes. CLTs are particularly valuable for families looking to transfer wealth to the next generation while minimizing tax exposure.
Which option is right for you? That depends on your priorities. If you need income now, a CRT might make sense. If you’re more focused on passing assets to children or grandchildren while supporting charity in the interim, a CLT could be the better fit. Our estate planning attorneys at Meurer & Potter Law Office can walk you through the numbers and help you decide.
Tax Benefits of Charitable Giving During the Holiday Season
Let’s be honest, tax benefits aren’t usually the primary reason people give to charity. But they certainly don’t hurt, and understanding them can help you give more strategically.
When you contribute to a charitable trust, you typically receive an immediate income tax deduction. The exact amount depends on several factors, including the type of trust, the payout rate, and the ages of the income beneficiaries. For a charitable remainder trust, the deduction is based on the present value of the charity’s remainder interest. For a charitable lead trust, different rules apply depending on how the trust is structured.
Beyond income taxes, charitable trusts can help reduce estate taxes. Assets placed in certain trusts are removed from your taxable estate, potentially saving your heirs significant money. And if you fund a charitable remainder trust with appreciated assets, like stock or real estate, you can often avoid capital gains taxes that would otherwise apply if you sold those assets outright.
The deadline matters here. To claim a deduction for the current tax year, your charitable trust needs to be established and funded by December 31st. That’s why we encourage clients to start these conversations early in the holiday season rather than waiting until the last minute.
Building a Family Legacy Through Charitable Planning
Legacy isn’t just about money. It’s about values, memories, and the mark you leave on the world. Charitable planning offers a way to weave all of these together.
We’ve worked with families in Denver and Greenwood Village who use charitable trusts as teaching tools. Parents and grandparents involve younger generations in decisions about which organizations to support, creating shared experiences and passing down philanthropic values. Some families establish donor-advised funds alongside charitable trusts, giving children and grandchildren hands-on involvement in grantmaking.
There’s also something powerful about naming a trust or fund after your family. It creates a tangible connection between your name and the good work being done, a connection that can last for generations.
At Meurer & Potter, P.C., we take an open, conversational approach to planning. We don’t force clients into boilerplate documents. Instead, we learn about your family, your business, and how you’d like to impact those you love. Then we customize an estate plan that achieves those specific goals. Charitable giving is often a meaningful piece of that puzzle.
Steps to Start Your Charitable Trust This Holiday Season
If you’re considering a charitable trust, here’s a practical roadmap for getting started before year-end:
1. Identify your goals. Are you looking for income? Tax savings? A way to pass assets to heirs? Supporting a specific charity? Knowing your priorities helps us recommend the right structure.
2. Choose your charity. The organization must be a qualified 501(c)(3) to receive the tax benefits. If you’re not sure which charity to support, you can name a donor-advised fund as the beneficiary and decide later.
3. Determine which assets to contribute. Appreciated stocks, real estate, and other assets often provide the greatest tax advantages. Cash works too, but you may be leaving benefits on the table.
4. Consult with an experienced estate planning attorney. Charitable trusts are powerful tools, but they need to be drafted correctly. The attorneys at Meurer & Potter Law Office have decades of experience creating trusts that achieve clients’ goals while complying with IRS requirements.
5. Fund the trust before December 31st. This is the critical deadline for claiming a deduction in the current tax year.
The process doesn’t have to be overwhelming. With proper guidance, many clients complete their charitable trusts in just a few weeks.
Conclusion
The holidays remind us that giving back is one of life’s greatest privileges. With thoughtful planning, you can support the causes you believe in, enjoy meaningful tax benefits, and build a legacy that reflects your values.
If you’re ready to explore charitable trusts or other legacy planning strategies, Meurer & Potter Law Office is here to help. Since 1991, we’ve been guiding Denver-area families through these important decisions, and we’d welcome the opportunity to do the same for you.
