Charitable Lead Trust
GOAL: Establish a gift plan that will benefit George School now and my heirs later
"I would like to make gifts to George School for a period of years and then pass on a sizable, appreciated inheritance to my heirs."
METHOD: Establish a Charitable Lead Trust with George School receiving current trust distributions and your heirs receiving the trust principal plus growth after a period of time.
FREQUENTLY ASKED QUESTIONS ABOUT CHARITABLE LEAD TRUSTS
WHAT IS A CHARITABLE LEAD TRUST?
A Charitable Lead Trust is a vehicle for transferring substantial assets to your children or grandchildren with the possibility of gift or estate tax savings, and the possibility of capital gains tax avoidance on the appreciation of the trust. During the term of the Charitable Lead Trust, usually between 10 and 20 years, the income from the trust is distributed each year as a charitable contribution to George School (or to George School and other charitable organizations). At the end of the term of the Trust, the assets once again become available to you or directly (tax free) to your heirs.
RETURN TO TOP CAN I ESTABLISH SUCH A TRUST WITH EITHER FIXED OR VARIABLE PAYOUT? Yes. The payout, if fixed, would be a percentage of the asset value at the time the Trust is established; the payout, if variable, would be a percentage of the market value of the assets calculated annually. Charitable Lead Annuity Trusts are more common, as they provide the charitable beneficiaries with a fixed certain annual gift and, in assuming growth of the trust assets, allow family members to benefit from the entire growth.
RETURN TO TOP WHEN IS IT MOST APPROPRIATE TO ESTABLISH A CHARITABLE LEAD TRUST? Whenever you want to make a substantial charitable contribution to George School over a period of years (typically 10-20 years), and you feel confident that you can live for this time period without the income generated by the assets you will use to establish the Lead Trust.
RETURN TO TOP WHAT IS AN APPROPRIATE AMOUNT TO USE IN ESTABLISHING A CHARITABLE LEAD TRUST? Lead Trust are typically established at $1 million and higher, because the principal purposes include charitable gifts and tax free transfers to family members. A $1 million/20 year term Lead Trust will provide George School with a gift of about $50,000-60,000/year.
RETURN TO TOP WHO SHOULD I CONTACT REGARDING A CHARITABLE LEAD TRUST? If you would like to see how this gift option applies to your particular situation, please call Director of Planned Giving Andy Popkin at 215.579.6563, or email him at
GSPlannedGiving@georgeschool.org.
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