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Charitable lead trust |
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Charitable lead trust. A charitable lead trust (CLT) is an irrevocable trust that allows you to provide current income generated by assets in the trust to a qualifying charity. When the trust terminates after the period specified in the trust agreement, the trust beneficiaries you've named receive the assets. Because of the delay in the transfer of assets to your beneficiaries, your gift is valued for tax purposes at its discounted present value, based on IRS tables. That amount may be less than the gift's market value, which affects the size of the charitable deduction you can claim. Transferring assets in a CLT not only reduces the value of your estate for estate tax purposes but also eliminates potential capital gains tax on any increased value of the assets. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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While charitable lead trusts (CLTs) first make a stream of payments to one or more charitable beneficiaries, then leave remaining trust assets to non-charitable beneficiaries, charitable remainder trusts (CRTs) do the opposite. A Charitable Lead Trust fund provides for a regular, fixed amount to be paid to a fund or charities of your choosing for a specific number of years, after which, the remainder of the trust passes to your designated heirs or other beneficiaries. Another example is a charitable lead trust, which allows the wealthy to give an allowance to their children, written off as donations rather than income. |
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