Making a Gift to Charity and Your Children
The charitable lead trust enables you to pass assets to your heirs at a reduced tax cost by making intervening payments to a charity like Children's Home Society of Washington. The lead trust holds appreciating assets for your lifetime or for a term of years, and pays an annual payout to Children's Home Society of Washington. Children's Home Society of Washington benefits from the guaranteed payouts from the lead trust, while your family enjoys several tax advantages:
- The gift assets placed in the lead trust are frozen in value for transfer-tax purposes as of the date the trust is formed. When the trust terminates and the assets pass to your family, all intervening appreciation will escape gift and estate tax.
- Payouts to Children's Home Society of Washington further reduce the taxable value of the trust assets when they pass to your family. This feature makes the lead trust especially useful if you are holding assets likely to appreciate significantly before they are transferred to the next generation.
Please call 206-388-5870 for a no-obligation illustration of your tax and financial benefits from this gift and to explore if this option is right for you. This is not professional legal or tax advice. Please consult your professional adviser about the consequences of this gift to your situation.