Charitable Lead Trust

A charitable lead trust is similar to a charitable remainder trust in that you transfer an asset to the trust, which reduces your taxable estate and saves estate taxes.

But with a charitable lead trust, the charity receives the income and your beneficiaries will eventually receive the principal. Since the beneficiaries must wait a while before they can receive the asset, its value is reduced for gift tax purposes. So you will pay substantially less in gift tax than if you left the asset to them outright.

A charitable lead trust would be appealing if you currently do not need the income, or if you have current charitable commitments you would like to continue in the future, and you want someone other than the charity (perhaps your spouse, children or grandchildren) to eventually have the assets.

For example, Jacqueline Kennedy Onassis included a charitable lead trust provision in her estate plan. The assets in the trust would benefit charities for 24 years, then go to her grandchildren. Unfortunately (for the charity), the trust was optional and no assets were transferred into it by John and Caroline Kennedy.

NOTE: This information is designed to provide a general overview with regard to the subject matter covered and is not state-specific. The authors, publisher and host are not providing legal, accounting or any other advice which purports to be specific to your situation. The contents of this website are believed to be completely reliable. Nevertheless, some material may be affected by changes in the laws or interpretations of such changes since the material was entered on the website. If legal advice or other expert guidance is required, the services of a competent professional in the field of law, accounting, insurance or investments should be sought.

Price & Farrington, PLLC - Attorneys and Counselors at Law
12501 Bellevue-Redmond Road, Suite 215 ....Bellevue, Washington 98005
Phone: 425.451.3583.. Fax: 425.452.0153 ..E-mail: contact@pricefarrington.com

About Us l What We Provide l Contact Us l Articles l Forms l F.A.Q. l Links l "FastFacts" l Sitemap l Home