An Egyptian girl holding one of her books
If you have substantial net worth and are interested in the following you may wish to consider a Charitable Lead Trust:
- Make regular gifts to Save the Children;
- Provide for your heirs;
- Engage in proactive financial planning;
- Minimize estate transfer taxes.
Lead Trusts are sophisticated arrangements that can offer clear benefits if you have substantial net worth. Generally, they are suitable if you have a minimum of $500,000 in assets that are not required for the production of income or for your future financial security. You should of course only set up a Lead Trust with the assistance of an experienced attorney, in consultation with your financial and accounting advisors.
What are Charitable Lead Trusts?
Charitable Lead Trusts are gift plans that permit you to place assets in trust to make specified payments to Save the Children for a designated period of time. At the end of the period, depending on the type of Lead Trust, either you regain possession of the corpus of the trust (a “grantor” trust) or the trustee distributes that corpus to others (a “non-grantor” trust). The non-grantor trust is the type generally used for estate planning purposes.
You may create a Charitable Lead Trust either by agreement during your lifetime or in your will. It is called a “lead” trust because charity receives the income or “lead” interest for a period of time, after which the corpus goes to others.
What are the advantages of a non-grantor Charitable Lead Trust?
The most attractive advantage is that you may be able to reduce the tax cost of transferring assets to family members and fulfill your charitable intentions at the same time. A non-grantor Charitable Lead Trust permits you to select the payout rate to the charity and the period of time over which the trust will make payouts.
