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Charitable Lead Trusts

A Charitable Lead Trust is often called the opposite of a remainder trust. It is not as common as other gift options but can be wonderfully effective in the right circumstances.

Let's say Phil and Alicia in this created example 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 forcollege 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.

Phil and Alicia's children were on their own and successful in their own careers. Phil and Alicia were financially secure and still earning a significant income. They were looking for tax benefits and, at the same time, a way to have an impact in other people's lifes through charitable giving.

Phil and Alicia wanted to contribute $250,000. 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.

As we said earlier, there are as many ways to support the College of Saint Benedict as there are needs for your support. Please contact us should you have questions or if you would like to discuss your personal circumstances to see how you can enrich your heart and the lives of others as many others already have.