Benjamin Franklin wrote to a friend in 1789, “In this world, nothing is certain except death and taxes.” Ben was half right. Taxes are optional. At death, anyway. They are optional even for taxpayers with estates large enough to owe state or federal estate tax. They are also optional for taxpayers who have funds subject to income tax at their death, such as amounts remaining in their retirement accounts. The solution? Give the taxable assets to charity.

We get a fair number of inquiries from clients regarding testamentary gifts. For bequest intentions, we typically talk about the need to discount the gifts – both from the perspective of assessing the probability of the gift actually being made AND from the perspective of estimating the present value of a future amount. With testamentary life income gifts, however, there are additional questions and points of concern. The donor is contemplating the eventual establishment of a gift that will provide income to someone else after the donor’s death. That means the calculations for a testamentary charitable gift annuity or testamentary charitable remainder trust are predicated upon multiple layers of assumptions.