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Charitable Lead Trusts
Goal: Pass assets to heirs at potential tax savings
Benefit: Charitable tax deduction, favorable estate tax circumstances
Phil and Alicia 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.
Phil: "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."
Alicia: "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
Phil: "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."
Alicia: "It sounded great to us - some tax benefits and our
estate remains intact for our grandchildrens' education. 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 ."
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 Mon General Hospital
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. The next
page has some final thoughts.