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Charitable Lead Trusts

If you have a sizable estate, wish to avoid taxes, and your heirs are generally taken care of for the foreseeable future, yet you wish to provide them with a substantial inheritance after your lifetime, a Charitable Lead Trust may be the right planned giving option for you. A Charitable Lead Trust is an excellent way to give an immediate gift to Angels Foster Care while ultimately transferring assets to your loved ones – often with significantly reduced gift and estate taxes.

Lifetime Charitable Trusts

You establish a Charitable Lead Trust by transferring cash or appreciated assets, such as securities or real estate during your life, to a trust for the benefit of Angels Foster Care. The trustee may be the charity, a financial institution, you, or an individual or your choice. Your trust then provides annual income based on fixed dollar amounts (annuity trust) or a fixed percentage of the value of the trust (unitrust) to Angels Foster Care for a fixed period, usually 10 to 20 years. In the year you establish the trust, you would be entitled to receive a charitable tax deduction for the present value of the income that will be distributed to Angel s Foster Care over the duration of the trust. This is particularly tax-advantageous, because you are entitled to the deduction up front, rather than being required to wait until distributions to Angels Foster Care are made. Upon termination of the trust period, the principal transfers to your beneficiaries, enabling you to pass significant assets to family members with little or no gift or estate tax. It is possible, depending on your charitable desires, for Charitable Lead Trusts to be drafted so that there are no taxable gifts generated, even though your family members will eventually receive the assets. Amounts held by the Charitable Lead Trust should not be includable in your taxable estate.

Testamentary Charitable Lead Trust

You may also establish a Charitable Lead Trust under the terms of your Will. This is effective way to make a sizable gift to charity while reducing your estate taxes. Your Will or Revocable Trust would provide that either a certain portion of your estate assets(or the amount that would create a non-taxable estate) should be transferred to a charitable lead trust upon your death. As with the lifetime lead trusts, there must be a fixed dollar amount (annuity trust) or a fixed percentage of the value of the trust (unitrust) that will be distributed to Angels Foster Care.

There are a variety of somewhat complex requirements that must be met in order for a Charitable Lead Trust to provide you with the tax advantages discussed above. We invite you to contact us for details on implementation of the Charitable Lead Trust.

Angels Foster Care would be pleased to work with you and your financial or tax advisor to establish the planned gift(s) that are most appropriate for you to achieve your financial planning goals. We are partnered with the Santa Barbara Foundation in the administration of our planned giving program. Please contact Meichelle Arntz, CEO of Angels Foster Care, at (805) 884-0012 or meichelle@angelssb.com for a confidential inquiry without obligation to you.