Charitable Lead Trust
A Charitable Lead Trust pays income to a charity for a certain period of years, and then the trust principal passes back to you, your family members or other heirs. The trust is known as a Charitable Lead Trust because the charity gets the first, or lead, interest.
How It Works
Charitable giving can play an important role in many estate plans. Philanthropy cannot only give you great personal satisfaction, it can also give you a current income tax deduction, let you avoid capital gains tax, and reduce the amount of taxes your estate may owe when you die.
There are many ways to give to charity. You can make gifts during your lifetime or at your death. You can make gifts outright or use a trust. You can name a charity as a beneficiary in your will, or designate a charity as a beneficiary of your retirement plan or life insurance policy.
Another way for you to make charitable gifts is to create a charitable trust. You can name the charity as the sole beneficiary, or you can name a non-charitable beneficiary as well, splitting the beneficial interest (this is referred to as making a partial charitable gift).
A Charitable Lead Trust can be an excellent estate planning vehicle if you own assets that you expect will substantially appreciate in value. If created properly, a Charitable Lead Trust allows you to keep an asset in the family and still enjoy some tax benefits.
Not a Deposit.
Not Insured by any Government Agency.
Not Guaranteed by the Bank.
May go Down in Value.