Charitable Lead Trusts

Assets may be passed intact to your heirs with significant tax savings while still giving a gift to The Quiet Hour. Like many, you would like to benefit from the tax savings that result from your generosity, yet you’re not ready to give entirely the assets in your estate for ministry. You can have it both ways with an estate planning strategy called a Charitable Lead Trust. This trust pays an income to the charity for the number of years that you specify, or for the life of one or more persons that you may name. The income may be the same amount for each year, or it may be a percentage of the trust value, whichever you choose. When the specified term is completed, the asset goes to your heirs, with estate or gift taxes reduced or possibly eliminated altogether.

You can choose either a Charitable Lead Trust during your lifetime, if you do not need the income, or a Testamentary Charitable Lead Trust upon your death. Either type allows you to carry out your gifting plans over a specified time period, to save taxes and yet keep control of the assets for your family.

EXAMPLE

When Dorothy’s husband passed away, he left her with the responsibility of managing a valuable estate. Dorothy realized that it was time to start planning what would become of their assets. After all, they had no children of their own. She wanted to benefit her relatives, but Dorothy also wanted some of her estate to go towards The Quiet Hour’s ministry, especially for international evangelism and outreach into dark areas of the world where the love of Jesus is unknown.

Dorothy’s estate exceeds $2 million. Upon her death, Dorothy’s estate will be taxed in the amount of $750,000. However with the proper planning, Dorothy could leave $500,000 to her family and have the remaining portion passed to a Charitable Lead Trust. The Lead Trust would pay a specific percentage of the income to The Quiet Hour for a determined number of years, and then pass the remaining trust assets to the family free of estate tax.

The Charitable Lead Trust allows Dorothy to leave her estate assets to her family and to The Quiet Hour at the same time, thus avoiding the eroding effects of estate and transfer taxes. This also allows Dorothy to leave a lasting legacy for The Quiet Hour’s ministry from her and her husband’s estate.

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