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Charitable Lead Trust

A charitable lead trust makes payments to the Taylor Foundation during the term of the trust.When the trust is over, its assets are paid to your heirs, to other individuals you choose, or are returned to you or your heirs.

What can I accomplish with a charitable lead trust?

  • You can pass assets to heirs at reduced or no estate or gift tax cost even if they grow in value while in the trust.
  • You support the Taylor Foundation by setting the percentage of income to be paid to the Taylor Foundation and the length of the trust term, subject to IRS rules.
  • You have the flexibility in choosing a fixed or variable income pay out to the Taylor Foundation and choose the length of the trust term.
  • You choose the trustee.

Are there different types of charitable lead trusts?
Yes, a charitable lead annuity trust pays the Taylor Foundation a set dollar amount from the trust each year (usually a percentage of the trust’s initial assets).
A charitable lead unitrust pays the Taylor Foundation a percentage of the trust assets as valued each year. This allows for more flexibility in determining the amount of income the Taylor Foundation receives each year.

What are my tax benefits?
An opportunity to pass highly appreciating assets to heirs at reduced or no estate or gift tax cost. You may also benefit from a charitable income tax deduction should you choose to retain the assets upon the end of the trust. The amount of your deduction will depend on your age, the amount used to fund the trust , the fixed rate set in the trust and the Internal Revenue Service discount rate.

What are my initial and ongoing costs?
You will need to have an attorney draft and/or review the trust agreement. You will pay costs associated with such review and other advice offered by your attorney. The trust will bear annual administrative cots and trustee’s fees should you choose a person or financial institution to serve as Trustee. The amount of those costs can depend on whom or which institution you choose as Trustee.

How can I find out more or notify the Taylor Foundation of my charitable lead trust?
Please contact Jenna Jacobs at jj@ptamd.org or 646-214-5815.

This is not legal advice. Any prospective donor should seek the advice of a qualified estate and/or tax professional to determine the consequences of his or her gift.

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