Charitable Lead Trusts

A Charitable Lead Trust (CLT) allows you to donate funds to Susan G. Komen Northwest NC each year, while at the same time ensuring that your loved ones are provided for at your death.  It is essentially the opposite of a Charitable Remainder Trust.  Here’s how it works:

  • You irrevocably transfer cash, securities real estate or other appreciated assets into the trust.
  • The trust pays income to Susan G. Komen Northwest NC for a specified term of years or for the lifetime of a designated person (you, your spouse, or others).  A Charitable Lead Unitrust (CLUT) pays Susan G. Komen Northwest NC a fixed percentage of the market value of the assets each year (which is re-valued annually), while a Charitable Lead Annuity Trust (CLAT) pays Susan G. Komen Northwest NC a fixed dollar amount each year.
  • You get an immediate charitable deduction in the year you create the trust which is the “present value” of the amount of income expected to be given to Susan G. Komen Northwest NC during the term of the trust.  However, in future years, you will be treated as the owner of the assets in the trust for income tax purposes, meaning you will be taxed on the income of the trust (even though most or all of the income is being paid to Susan G. Komen Northwest NC.
  • At the end of the trust term, or upon the death of the named person, the remaining assets revert to you, or pass your heirs or other persons that you choose.
  • If you create a trust that pays out upon your death, all appreciation of trust assets can pass to the next generation tax-free.
  • If you structure the CLT correctly, the assets will not be included in your estate for estate tax purposes.
  • You can name anyone you want to be the Trustee, including yourself, a family member, or a bank.

CLTs are trusts that will have to be set up by an attorney, but once they are in place, they can offer great benefits for you and for Susan G. Komen Northwest NC.