A charitable lead trust is a gift arrangement whereby you transfer cash or other property to a trust which pays its income to a qualified charity for a period of years – or a time measured by one or more lives – and which returns the remaining principal to other beneficiaries, usually children or grandchildren, at a reduced or eliminated transfer tax.

How does it work?

With the assistance of your attorney, you create an irrevocable trust agreement into which you place cash or other assets. You set the terms of the trust – the length of the trust, the percentage payout from the trust, the charitable income beneficiary, and the remainder beneficiary. These terms become irrevocable upon execution of the trust agreement, which in most cases is at death.

What are the benefits?

  • Estate or Gift Tax Deduction: Depending on the length of the trust term, and the payout to charity, a significant portion – if not the entire amount – of the trust, qualifies for an estate or gift tax deduction.
  • Delayed Inheritance: The trust term might allow for a full-value inheritance to your children or grandchildren at a time when they might have greater need or ability to handle a large bequest.

Can this be done while I’m alive?

Yes! When created during your lifetime, you receive a gift tax deduction rather than an estate tax deduction. Furthermore, if you live beyond the term of the trust, you will be able to witness the income benefits that your trust provides to charity as well as the remainder benefit passing to your heirs.

Who manages the trust?

A trustee must be named to manage the trust assets. This might be a trust company, a financial advisor, a trusted individual, or in some cases – you can serve as trustee of your charitable trust. The trustee must ensure that annual tax reporting is completed, as well as handle the investment of the trust assets. Haggai International can serve as trustee of charitable trusts.

If you have questions or to advise us of your desire to transfer mutual fund shares, closely held or restricted stock, or to create a planned gift using securities, please contact:

Gary W. Key
Chief Development Officer
4725 Peachtree Corners Circle, Suite 200
Peachtree Corners, Ga. 30092
Office:  770-810-1413 Mobile:  404-556-6660

DISCLAIMER: The information contained on this page is for educational purposes only. The reader understands that Haggai International is not rendering legal advice and that the reader should seek independent legal counsel when contemplating estate planning decisions.