charitable lead trust

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Charitable Lead Trust

An irrevocable trust into which the grantor deposits assets, with the income from the investment of these assets going to a designated charity for a certain period of time. After that time expires, the remainder of the assets and income are given to the trust's beneficiaries. A charitable lead trust allows the grantor to provide for his/her survivors after death while reducing to a minimum the estate tax because some of the assets were given to charity. See also: Charitable remainder trust.

charitable lead trust

A trust that pays an income to a charity for a specific length of time then leaves the remainder of the trust to designated beneficiaries, usually family members. The purpose of the charitable lead trust is to reduce taxes on the estate of the deceased while maintaining the family's control of the estate's assets. Compare charitable remainder trust.

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.

References in periodicals archive ?
With charitable lead trusts, a portion of the trust income is donated to specified charities and then, after a certain period of time, the remainder of the trust is transferred to the beneficiaries, and any appreciation on the value of the assets is free of either gift or estate taxation.
Regulatory projects included regulations on qualified domestic trusts, generation-skipping transfer tax, charitable remainder trusts, charitable lead trusts, adequate disclosure for gift tax purposes, separate share, definition of foreign and domestic trusts, and valuation tables.
There were 6,498 charitable lead trusts with total assets of $23.
From a tax perspective, charitable remainder trusts (CRTs) and charitable lead trusts (CLTs) can offer three main benefits.
3,4) Split-interest trusts include three distinct types: charitable remainder trusts, charitable lead trusts, and pooled income funds.
Sherby's practice involves representation of private individuals in all aspects of wealth transfer planning, including the implementation of sophisticated planning techniques involving grantor retained annuity trusts, family limited partnerships/limited liability companies, charitable remainder trusts, charitable lead trusts and other similar wealth transfer techniques.
Of the three types of split-interest trusts (SITs), trustees of charitable lead trusts continued to be the most likely to file both initial and final returns, with returns for ongoing trusts making up only 86 percent of the CLTs filed.
Renaissance currently administers in excess of $4 Billion, consisting of over 4,500 charitable remainder trusts and charitable lead trusts as well as more than 4,650 donor-advised funds (DAFs).
For clients with charitable intent, discuss charitable remainder and charitable lead trusts to provide current tax deductions.
However, returns filed for charitable lead trusts reported the highest average gross income per return.
Charitable lead trusts are required to pay certain fixed amounts to charity for a number of years.

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