Should You Consider Using a Charitable Lead Trust?

Do you want to leave behind a legacy for charity in addition to accomplishing your estate planning goals? If so, read on to learn more about the options available with a charitable lead trust.

A family that intends to give to charity while also minimizing estate and gift taxes should consider all possible strategies recommended by an experienced estate planning attorney.

A charitable lead trust may be one such tool that is effective for families looking to accomplish this goal. These trusts work the best in a low interest rate environment so the present conditions for taking advantage of a charitable lead trust are favorable. Interest rates may have increased somewhat over the last couple of years but are still historically low. There are two major types of charitable lead trusts.

The first is known as a charitable lead unitrust, which pays out a set percentage of the assets inside the trust recalculated on an annual basis. The second type is known as a charitable lead annuity trust which makes annual payments to the charity associated with a fixed percentage of the initial value of the trust assets or a fixed dollar amount.

Consulting with an experienced estate planning attorney can help you identify which one of these options is most appropriate for you and how you can accomplish your estate planning goals using tools like charitable lead trusts.