|
|
 |
|
Charitable
Lead Trusts
A charitable lead trust (CLT)
exists for a term of years or a lifetime,
during which time the trust makes
payments to a charitable beneficiary
you name. When the charitable term
ends, trust assets are either returned
to you (a grantor trust) or released
to other persons you name (a non-grantor
trust). Transferring assets to a CLT
can remove them from your estate and
pass them to heirs with little or
no tax liability. A gift tax discount
arises because of the charitable interest
preceding your heir's interest.
Example: You make a $500,000 gift
to a twenty-five year CLT paying $30,000
per year to charity before passing
to your children. The gift to your
children is valued at only a fraction
of $500,000.
A CLT pays either a fixed amount to
charity, or a a fixed percentage of
the trust's value determined annually.
By structuring a CLT to return assets
to you, you may obtain an income tax
deduction for the charitable interest.
In the example above, if the assets
revert to you after twenty-five years,
the charitable interest is a large
portion of the $500,000.
For more information about trust services or any other service provided by New Covenant Trust Company, please contact Chip Walker at 800-528-4083, ext. 5912 or e-mail at cwalker@newcovenanttrust.com. Contact your tax advisor to determine how these trusts would actually affect your estate. |
|
|
