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Charitable Lead Trust

Advantage to Donors:
Lead trusts are very appealing income and wealth transfer vehicles for donors with estates of several million dollars or more
The tax benefits are particularly appealing when the IRS floating interest rate (used to compute a charitable deduction) is low.
A "Grantor Lead Trust" is a useful tax savings device for assisting charity with periodic trust payments for several years. Property placed in the trust reverts to the grantor (donor) when the trust terminates. The grantor receives an income tax charitable deduction at the time property is transferred to the trust. In addition, though trust income is taxable to the grantor, taxation can be avoided by funding the trust with tax exempt municipal bonds.

A "Family Lead Trust" is used to assist charity while reducing or avoiding the gift and estate transfer tax on property placed in trust and later transferred to family (or others). The trust is designed to make periodic payments to charity for a period of several years, after which the trust terminates and the assets pass to the designated individuals either outright or in trust.

The Family Lead Trust is an excellent tool for donors to eliminate or reduce the gift tax cost of transferring wealth to children or grandchildren, and to channel future appreciation to heirs without further estate and gift tax liability. It is also an excellent vehicle for using a donor unified estate and gift tax credit now rather than later (when its value is likely to be eroded by inflation).

One type of a Family Lead Trust, known as a lead unitrust, is very useful for maximizing the donor’s generation-skipping tax exemption.

Major gift donors may use charitable lead trusts to fulfill pledge agreements with cash, stock, real estate (or a combination of these assets) placed in trust. The periodic payments to charity from the lead trust are ideal for establishing large endowed funds or to fund other special charitable projects

How Do I Make a Gift Using a Charitable Lead Trust?

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	Charitable Lead Trust Advantage to Donors: Lead trusts are very appealing income and wealth transfer vehicles for donors with estates of several million dollars or more The tax benefits are particularly appealing when the IRS floating interest rate (used to compute a charitable deduction) is low. A "Grantor Lead Trust" is a useful tax savings device for assisting charity with periodic trust payments for several years. Property placed in the trust reverts to the grantor (donor) when the trust terminates. The grantor receives an income tax charitable deduction at the time property is transferred to the trust. In addition, though trust income is taxable to the grantor, taxation can be avoided by funding the trust with tax exempt municipal bonds. A "Family Lead Trust" is used to assist charity while reducing or avoiding the gift and estate transfer tax on property placed in trust and later transferred to family (or others). The trust is designed to make periodic payments to charity for a period of several years, after which the trust terminates and the assets pass to the designated individuals either outright or in trust. The Family Lead Trust is an excellent tool for donors to eliminate or reduce the gift tax cost of transferring wealth to children or grandchildren, and to channel future appreciation to heirs without further estate and gift tax liability. It is also an excellent vehicle for using a donor unified estate and gift tax credit now rather than later (when its value is likely to be eroded by inflation). One type of a Family Lead Trust, known as a lead unitrust, is very useful for maximizing the donor’s generation-skipping tax exemption. Major gift donors may use charitable lead trusts to fulfill pledge agreements with cash, stock, real estate (or a combination of these assets) placed in trust. The periodic payments to charity from the lead trust are ideal for establishing large endowed funds or to fund other special charitable projects How Do I Make a Gift Using a Charitable Lead Trust?








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