Manatt Partner Interviewed on Charitable Gift Increases in 2012

Manatt Partner Interviewed on Charitable Gift Increases in 2012

"Deduction Uncertainty Fuels Giving by the Wealthy"
The Chronicle of Philanthropy

December 21, 2012 - Manatt's Jill Dodd, a partner in the firm's Family Wealth Transfer Planning & Trust and Estate Administration and Not-For-Profit Organizations Practices, spoke to The Chronicle of Philanthropy about how concerns of the fiscal cliff have prompted wealthy people to give more to charity.

The Chronicle of Philanthropy reports that big donors are giving more than they planned this year to charity, due to their concerns that Congress won't work out a deal on the fiscal cliff and will allow tax rates to rise. Wealthy people are also fearful that Congress could limit the write-offs affluent people receive for their charity gifts.

Donors can currently give up to $5.1 million, or $10.2 million per couple, tax-free to heirs, either during their lifetimes or at death. But unless Congress intervenes, starting on January 1, they will be able to give away only $1 million tax-free; everything else in their estates would be taxed at a rate of 55 percent.

As a result, Dodd said, wealthy families "are doing massive amounts of giving because they want to decrease their taxable estate." While most of that giving is to heirs, she said, the anticipated change to the estate tax has prompted many donors to review their charitable plans, and some are making additional gifts this year. 

A few months ago, Dodd and her colleagues provided wealthy clients with a tax-planning advisory titled "Why 2012 is a Great Year to Make a Philanthropic Gift." The material explains a provision of the new healthcare law that will impose a 3.8-percent tax on investment income of affluent people and another proposal to increase the capital-gains tax from 15 to 20 percent next year.

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