Charitable Lead Trust

What is a Charitable Lead Trust (CLT)? A charitable lead trust, the inverse of a charitable remainder trust, is an irrevocable trust that generates a potential income stream for charity, with the remaining assets eventually going to family members or other beneficiaries. It is an attractive option for both donor and charity in that it can generate generous income for the charity, and still result in an inheritance for the donor’s heirs. Is establishing a Charitable Lead Trust right for you? If you answer yes to any of these questions, a charitable lead trust could be right for you:

• Do you have significant wealth that you would like to benefit both charity and your heirs?
• Would you like to maximize tax benefits to your heirs upon inheriting your estate?
• You do not need income from the investment during your lifetime.

How does it work? A charitable lead trust is an irrevocable trust that provides a fixed amount or a percentage of the trust assets to GSH for a specified term. At the expiration of that term, the remainder interest is either retained by the donor or given to a non-charitable beneficiary, usually a family member. A well-crafted charitable lead trust can present significant tax benefits depending on terms and rates of return. Often donors can effectively transfer wealth to their heirs with minimal or no gift tax consequence. CLTs are attractive but nuanced planned giving tools, so it’s important to involve an experienced financial planner in their creation. Interested in Learning More? If you think a charitable lead trust could be a good fit for you, we’d love to schedule a time to talk about options, details, and next steps. Please contact the Good Shepherd Housing and Family Services Office of Development via this form.