CHARITABLE LEAD TRUSTS
Donors who wish to provide income to charity while ultimately transferring assets to younger generations can establish a Charitable Lead Trust (CLT). Depending on how the trust is structured, the donor may be able to remove income and future appreciation on an asset from his or her estate without permanently relinquishing management of the asset.
A donor contributes assets to an irrevocable trust and, depending on the structure of the trust, may be entitled to an income tax charitable deduction. For a set term of years, or the duration of the donor or other beneficiary’s life, the trust pays an annual amount to one or more charities named by the donor. At the end of the payment term, the remaining assets will pass to the donor’s beneficiaries, typically their children or grandchildren.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
A donor contributes assets to an irrevocable trust and, depending on the structure of the trust, may be entitled to an income tax charitable deduction. For a set term of years, or the duration of the donor or other beneficiary’s life, the trust pays an annual amount to one or more charities named by the donor. At the end of the payment term, the remaining assets will pass to the donor’s beneficiaries, typically their children or grandchildren.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.