Trusts

The Charitable Lead Trust is an attractive alternative to the traditional

income trust for those seeking to reduce potential gift tax assessments,

and to ultimately benefit a charitable cause as well as family members.

A Charitable Lead Trust enables a Grantor to make an irrevocable gift

to the trust during his or her lifetime, with income from the trust paid

to one or more charities for the term of the trust. The charity receives

income from the trust for a specified period of years, or until a specified

event occurs. At the end of the trust term, the remaining trust assets are

distributed to designated family members or trusts established for their

benefit. Additionally, the tax value of the Grantor’s initial gift of appreciated

assets to the trust is reduced by the actuarial value of the lead interest

going to the charity.

The Charitable Lead Trust is appropriate for individuals who wish

to include charitable beneficiaries in their overall estate plan. This

trust arrangement is also appealing to individuals who expect to have

significant estate tax liabilities, as it enables them to make future

transfers of assets to family members at reduced gift tax costs.

Benefits of the Charitable Lead Trust

• Benefits charity and may provide Grantor with a charitable

income tax deduction.

• Freezes value of assets for transfer tax purposes – none of the

appreciation in the trust’s assets is subject to gift or estate tax.

• Sustainability reduces gift valuation – the longer the trust runs,

the less the value of the gift for tax purposes.

• Family assets stay in the family; the ultimate disposition is to

the family.

For more inforamtion contact:

John Licitra CFP, CTFA, MS

Senior Private Client Advisor

Wilmington Trust, NJ Fsb

902 Carnegie Ctr Ste 460

Princeton, NJ 08540-6530

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