What policies President-elect Trump chooses to pursue and whether they prove to be successful or not, could have a dramatic impact on charitable giving.
Whether it is to set up a lasting charitable legacy or to avoid paying the estate tax, creating plans for charitable giving has always been an important part of estate planning. After the unexpected results of the Presidential election, it is not clear exactly how estate planners will deal with their clients’ charitable wishes. It is actually not clear which policies President-elect Trump will pursue after his inauguration that will have an impact on charitable giving.
Bloomberg looked at some of the possibilities in “Where Charitable Giving May Head With Trump.”
Trump has stated that he will increase GDP growth by 4% per year, which would likely lead to more charitable giving. However, many economists doubt he will be able to fulfill that promise due to economic and demographic circumstances which are beyond his control.
The President-elect campaigned on cutting taxes, especially on the wealthy. This would also likely increase giving to charity. However, his nominee for Treasury Secretary has cast some doubt on those tax cuts, by recently stating that any cuts on the wealthy will be offset by reducing deductions.
It is also thought that Trump would like to eliminate the estate tax. This could reduce some charitable giving, at least when the impetus for the giving is to shrink the value of the estate.
Some of this uncertainty should be cleared up soon, when the President-elect begins submitting budget proposals to lawmakers. They should give an indication of what policies he will pursue.
Reference: Bloomberg (Nov. 27, 2016) “Where Charitable Giving May Head With Trump.”
