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Gift & Estate Planning: Charitable Lead Trust

Charitable Lead Trust
September 2, 2019 Shawn Sweeney

You can “Loan” Your Assets temporarily to the Jane Goodall Institute, benefitting JGI and its programs and eventually return the assets to your loved ones. This can be done through a Charitable Lead Trust (CLT).

Under the terms of a CLT, the Jane Goodall Institute would receive income payments from the trust as soon as it is established, lasting for a period of time you determine. At the end of that time period, the trust’s remaining assets are returned to you or other loved ones you designate, at little or no after-tax cost.

In A Nutshell

Donor Receives Donor receives no income from the trust. Check with advisors on specific tax treatment of different types of charitable lead trusts.
Tax Savings In most cases, either a current income tax charitable deduction or gift and estate tax deductions.
Other Advantages to the Donor May provide a means to make a significant gift and have assets returned to donor, or transferred to loved ones at reduced cost.
The Jane Goodall Institute Receives Either fixed or variable payments for the term of the trust.

HOW IT WORKS

  1. You transfer assets to a Trustee of your choice (JGI will not serve as the Trustee) and create a Charitable Lead Trust.
  2. The Trustee invests the trust assets. The taxation and benefits vary depending on the specific type of lead trust you establish.
  3. The trust makes payments (either a fixed percentage of the principal or a fixed dollar amount, depending on the type of Trust) to JGI for life or a term of years.
  4. When the trust terminates, the remaining principal is paid to your heirs.

CLTs work very well for those wishing to leave a significant inheritance for children or grandchildren, but want to wait until the heirs have the need and/or maturity to handle the funds.

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