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Mary's College Planned and Special Gifts 110 Le Mans Saint Mary's College Notre Dame, IN 46556 574/284 4600 Fax 574/284-4749 jamacken@saintmarys.edu Planned Giving |
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Charitable Lead Trusts What it is A Charitable Lead Trust (CLT) is often called the opposite of a Charitable Remainder Trust. The CLT is a powerful way to make a future transfer of assets to your heirs at a significantly reduced gift and estate tax cost, while also supporting your charity with income. During a specified number of years, the lives of one or more individuals, or a combination of the two, an annuity or a fixed percentage of the trust assets is paid to the charity of your choice. At the end of the trust term, the assets pass to beneficiaries named by the donor. The donors choose the trustee. You can fund a CLT with cash, publicly traded securities, closely-held stock, income-producing real estate, partnership interests, or a combination of the above. You can establish a CLT during your lifetime, or as a testamentary trust through your will. How it Works Catherine and George wanted to contribute $250,000 to Saint Mary's College. They placed a sufficient amount of income producing commercial property into a Charitable Lead Trust (CLT) that would make annual payments of $25,000 over ten years. This will provide the charity with $250,000 in total and after ten years, the assets will pass to the donor's heirs. Because the gift tax deduction and the amount subject to gift tax is determined at the time the assets are contributed to the CLT, any appreciation of the assets that takes place during the term of the trust is not subject to additional gift or estate tax. Catherine and George had been married for forty-seven years. They had a successful business developing both residential and commercial real estate. They realized that their assets provided more income than they need for their family's current living expenses; however they wanted to maintain their assets to ensure their grandchildren would have resources for college educations. One of their first charitable gifts had been a gift of appreciated stock. They discussed their circumstances with their financial advisor who showed them how they could make a charitable gift now and be able to enjoy seeing the results while they were still here. George: "It really has been a wonderful ride. When we first started developing residential housing, we had no idea where it would all lead. We were fortunate to make some choices that really set up the company for success. It's grown beyond our wildest dreams." Catherine: "We have been able to provide a wonderful home for our children, but they are off on their own now with their own families. While the company has grown, our immediate needs have shrunk." George: "Not too long ago, we sat down with our kids and our advisors and talked about what was important to us and what we really wanted. Our kids are all doing fine on their own. We certainly don't need more. Our attorney told us about something called a charitable lead trust funded with some of our excess assets." Catherine: "It sounded great to us - some tax benefits and our estate remains intact for our grandchildren's educations. While we are helping to make a difference in other people's lives, we're able to do it while we're here and can be part of it. It really feels good to see firsthand how the income from the trust can really make a difference ." We mentioned earlier that a CLT is often called the opposite of a Charitable Remainder Trust (CRT). Now click here to meet Susan and John and learn about CRTs.
©
2002 Saint Mary's College
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©
2002 Saint Mary's College
Development Office
