USA Law and Practice Contributed by: Christopher Boyett, David Scott Sloan, Max Angel and Eric Bracy, Holland & Knight LLP
tain assets that private foundations generally cannot, such as closely held business interests, real estate, and partnerships, without triggering the same self- dealing or excess business holdings restrictions. This makes them especially attractive for donors who wish to contribute illiquid or complex assets while maintain - ing a close relationship with the supported charity. Other Options DAFs are charitable accounts held by public chari - ties that allow donors to make contributions, receive immediate tax deductions, and recommend grants over time. DAFs are easy to set up and maintain, offering flexibility and privacy. However, donors do not retain legal control over the funds and can only suggest, not direct, how grants are distributed.
CLTs provide income to a charity for a set term, after which the remaining assets pass to non-charitable beneficiaries. This structure can reduce gift and estate taxes while supporting charitable causes during the donor’s lifetime. CLTs are more complex to administer and may involve upfront gift tax considerations. CRTs operate in reverse, paying income to the donor or other beneficiaries first, with the remainder going to charity. CRTs offer income tax deductions and capital gains tax deferral, making them attractive for donors with highly appreciated assets. However, they are irrevocable and require ongoing administration.
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