The Ledger Behind the Legacy: DAFs, CRTs, and the Class E Exemption

Between the ocean and the ledger, Monmouth families are redrawing their giving maps

The Monmouth shore has never been short of families who plan ahead. What has changed in 2026 is the arithmetic: the federal estate-tax exemption now sits at roughly $15 million per individual, New Jersey repealed its own estate tax in 2018, and the state inheritance tax — which still applies to non-lineal heirs at 11–16% — makes the Class E charitable exemption the quietest and most reliable line in the estate plan. This week's four instruments are the donor-advised fund at the Community Foundation of New Jersey, the charitable remainder trust, the charitable lead trust, and the Class E charitable bequest. Together they answer the same question a different way than a will does: how does a family keep the giving running after the last signature is gone?

Donor-advised funds at CFNJ — the fast, flexible vehicle

The Community Foundation of New Jersey in Morristown is the region's established DAF sponsor. A DAF there works the same way it works at any community foundation: a family contributes cash or appreciated assets, takes an immediate charitable deduction, and recommends grants over time to the institutions that matter to them.

• CFNJ has delivered about 8,000 grants annually on behalf of fundholders and leverages $1.3 billion in assets across roughly 1,200 funds – cfnj.org
• When opening a DAF at CFNJ, a family is matched with a donor-services team member who helps set giving goals, identify nonprofits, and plan a future giving schedule – cfnj.org
• CFNJ's investment management follows industry standards, with different allocation options based on the family's time horizon for giving – cfnj.org
• Phone: 973-267-5533 · info@cfnj.org – cfnj.org

Charitable remainder trusts — the income-and-remainder structure

A charitable remainder trust (CRT) is the workhorse of planned giving for families holding appreciated assets. The family transfers assets into the trust, receives a stream of income for a term of years or for life, and the remaining balance passes to a charity at the end of the trust term.

• A CRT can be structured as an annuity trust (a fixed dollar payment each year) or a unitrust (a fixed percentage of the trust's fair market value, redetermined annually) – davidkwhitlock.com
• The grantor receives a current federal charitable income-tax deduction equal to the actuarial value of the remainder interest passing to charity, and the asset is removed from the taxable estate – simonattorneys.com
• Appreciated assets contributed to a CRT can be sold inside the trust without triggering immediate capital-gains tax, because the trust is tax-exempt under IRC § 664 – milvidlaw.com
• New Jersey's inheritance tax does not reach the charitable remainder; transfers to qualified charities are exempt under N.J.S.A. 54:34-1 – simonattorneys.com

The Class E exemption — the line most families overlook

New Jersey's inheritance tax sorts beneficiaries into lettered classes. Class A (spouses, children, grandchildren, parents, grandparents) is fully exempt. Class C (siblings, in-laws) is taxed at 11–16% after a $25,000 exemption. Class D (nieces, nephews, friends, unmarried partners) is taxed at 15–16% with no exemption. Class E — qualified charitable organizations — is fully exempt.

• Class E beneficiaries include qualified charitable organizations, religious institutions, educational institutions, and government entities — all fully exempt from NJ inheritance tax – papolalaw.com
• Leaving assets to a charitable organization (Class E) eliminates the inheritance tax on those assets entirely – papolalaw.com
• Structuring charitable giving through the estate plan ensures those assets pass as Class E, tax-exempt transfers – njelc.com
• New Jersey has no state estate tax for individuals dying on or after January 1, 2018; the inheritance tax remains in effect and is assessed on the beneficiary, not the estate – nj.gov

Charitable lead trusts and the 2026 federal exemption

The charitable lead trust (CLT) is the mirror image of the CRT: the charity receives the income stream for a term, and the remaining assets pass to the family's heirs at the end. In 2026, with the federal estate-tax exemption at roughly $15 million per individual, the CLT is a tool families use to shift value to the next generation while taking a current charitable deduction.

• Placing funds in a charitable lead trust can allow donors to reduce income, gift, or estate taxes on items donated to the trust – vandyckfirm.com
• The federal estate and gift tax exemption in 2026 is $15 million per individual ($30 million for married couples) – creativeplanning.com
• New Jersey does not offer a state-level charitable income-tax deduction equivalent to the federal § 170 deduction, so the federal deduction is ordinarily the primary income-tax benefit of a CRT or CLT for an NJ resident – simonattorneys.com
• Charitable arrangements can preserve significant parts of the estate while ensuring donated funds have the maximum desired impact on the causes the family chooses – vandyckfirm.com

Why it matters locally

None of these structures requires a family to leave Monmouth, hire a New York or Boston trust bank, or move assets out of the county. A DAF at CFNJ can recommend grants to the Two River Theater, the Monmouth Conservation Foundation, the Junior League, the Riverview Medical Center Foundation, or any other 501(c)(3) on the shore. A CRT can be funded with a family's appreciated stock and pay the parents income for life while the remainder goes to the local institution that raised them. A Class E bequest in a will or trust puts legacy giving on the record without touching today's liquidity. The through-line for families in Rumson, Fair Haven, Little Silver, Colts Neck, Holmdel, Middletown, Deal, Sea Girt, and Spring Lake is that the tax code has made planned giving more efficient than ever, and the local institutions that will receive the remainder have never been more organized to steward it.

How to get involved

• Open a DAF at CFNJ. Call 973-267-5533 or email info@cfnj.org. A donor-services team member will help set goals, identify nonprofits, and plan a giving schedule – cfnj.org
• Talk to an NJ estate-planning attorney about a CRT or CLT. A qualified attorney can model the income, deduction, and remainder trade-offs for your specific assets before you sign anything; state tax exposure should be reviewed before creating, funding, or administering a charitable remainder trust – cooperlevenson.com
• Add a Class E charitable bequest to your will or trust. A single clause naming a community foundation or local 501(c)(3) puts legacy giving on the record and qualifies the transfer as tax-exempt under NJ inheritance-tax law – njelc.com
• Support Love of Humanity. The family-facing education work that connects these instruments to Monmouth institutions. lovehumanity.charity/#donate · Stripe Choose Your Amount
• Partnership: Board leader, foundation director, head of school, or family-office trustee reading this? We build co-branded family education with Monmouth institutions. partnerships@donatetoloveofhumanity.com

How Love of Humanity supports this work

Love of Humanity is a Monmouth County 501(c)(3) that works alongside the county's charitable institutions and the families who support them as a peer organization, not a funder. We help families understand the DAF, CRT, CLT, and Class E landscape before they commit, we connect planned-giving structures with the institutions that will steward them, and we co-develop the family-education content that turns a single estate-planning conversation into a durable understanding of how the giving will actually land. If you sit on a board, direct a foundation, or steward a family office in Monmouth, we build co-branded family education with the institutions you already trust. Reach the executive director at partnerships@donatetoloveofhumanity.com.

This roundup is editorial. No fees were paid. Love of Humanity is a 501(c)(3) nonprofit.