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Support Audubon >Planned Giving
Charitable Lead Trusts
(Complete gift description)
If you are inclined to support Audubon over the long-term and also want to pass assets to your family at reduced tax cost, a Charitable Lead Trust may be an ideal way to accomplish your goals.
With a Lead Trust, you would place assets (cash, stocks, mutual funds, etc.) in a trust which runs for a specific length of time. During that time, the trust would make fixed annual payments to Audubon. At the end of the trust period the assets would be distributed to the heirs which you specified in the trust agreement. If your estate will be subject to estate or gift taxes, a Lead Trust may be especially attractive because it can be structured to pass the remaining assets to your heirs at greatly reduced tax cost. In some cases, it may be possible to completely eliminate taxes.
What are the tax advantages of this type of lead trust?
The lead trust reduces the cost of passing property to your heirs in two ways. First, the value of the assets you place in your lead trust, for estate and gift tax purposes, will be reduced by the present value of the income that the trust will pay Audubon. Second, the taxable value of the lead trust's assets is fixed at the time you establish the trust. This means that any subsequent increase in the value of the assets will pass to your heirs outside your estate and thus free of estate or gift tax.
In other words, this combined reduction in the taxable value of the assets means that your family can often receive more from an estate plan containing a lead trust than they could from an outright bequest from you.
Are there additional features that I should consider?
- The lead trust can be funded with shares in a growing family business, thus lowering the tax cost of passing ownership on to the next generation.
- The income earned by a non-grantor lead trust while it is in operation is not taxable to you.
- The lead trust is the only income-gift that delivers immediate benefits to Audubon.
- The longer the lead trust pays Audubon income, and the more income it pays us, the larger your estate and gift tax deduction will be.
How is the amount given to Audubon determined?
When you create your trust, you have several options. First, you can decide whether you want us to receive a fixed amount of income each year (an annuity lead trust), or whether we will receive a fixed percent of the value in the trust (a unitrust lead trust).
Can I direct the trust to return principal to me?
Yes. A Lead Trust structured this way is called a “Grantor Lead Trust.” We would be happy to discuss the benefits of either type of Lead Trust to you and your professional advisors.
How do I create a Charitable Lead Trust?
Setting up a charitable lead trust is not particularly difficult, but you should be advised by an attorney with expertise in the area of charitable trusts and estate planning. Our staff will be pleased to provide detailed illustrations showing how the gift you are considering would work for you. We urge you to consult an accountant or attorney who is knowledgable about charitable gift and estate planning.
For more information
Email us, complete the personal illustration form, or call us at 212-979-3033 so that we can assist you through every step of the process.
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