A charitable leads trust lets you to support your favorite cause and also provide for loved ones after your passing. It is an irrevocable trust to provide financial support to one or more charities, and the remaining assets will pass to family members or other beneficiaries. You can choose to set up a charitable leads trust to pay during your life or at your death.
Your beneficiaries get the same gift and estate tax benefits as the charity. If the trust assets increase over the life of the trust, your beneficiaries inherit the balance when the trust ends.
Leftover assets going to your non-charitable beneficiaries can be transferred free of federal gift and estate tax. Charitable trusts are usually complicated and subject to specific IRS rules, so anyone considering establishing a charitable trust, including a charitable lead trust, should consult with their legal or tax advisor, says Fidelity Investments. There are two types of charitable lead trust that affect its tax treatment—grantor and non-grantor trusts.
The charity receives a stream of income for as long as the trust lasts. A charitable leads trust is an easy and convenient way to make regular donations to a charity.
Charitable leads trusts are very complicated and require good legal advice from an estate planning attorney to set up.
Our experienced trust and estate planning attorneys in Lombard Illinois understand applicable laws and advise you on the best options to protect your assets and loved ones. To talk to a trust attorney contact the Estate & Probate Legal Group at (630) 382-8063.