Tom and Heidi worked hard for many years building their nest egg for retirement. While they felt their savings and investments would cover their needs, they wanted to make sure that their children were taken care of financially.
Heidi: We wanted to continue making annual gifts to Oakland Symphony. At the same time, I was concerned about sacrificing our children's inheritance.
Tom: Our stock portfolio had appreciated significantly over the years. I wanted to pass these gains on to my family without paying a lot in gift or estate tax.
Their financial advisor suggested a charitable lead trust could help them achieve their personal and charitable goals. The trust would pay income to the charity of their choice for a number of years. Then the full trust value, plus any growth, would go to their children. This would allow them to pass on substantial wealth to their family with little or no gift tax. It would also reduce the size of their estate in addition to helping causes they care about.
Heidi: I could see how this plan would be very helpful if we funded the trust using our stock. Each of our children would receive one-third of the trust assets in the future. At the same time, we could continue to make gifts to charity each year.
Tom: It would give our children time to learn how to save and invest their future inheritance. We were happy at the prospect of helping our children succeed in the future and providing for our favorite charitable cause.
Is a charitable lead trust right for you?
A charitable lead trust can be an excellent tax-planning strategy. If you have questions about lead trusts, please contact us
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