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Charitable Lead Trust

If you are looking for a way to pass on some of your assets to your family or you received a large windfall this year and need to reduce or eliminate gift or estate taxes, a charitable lead trust may be an excellent option.

Charitable Lead Trust
Property
Lead Trust
Term of
Years
Income to CSULB
Trust to Family
Charity image

How it Works

  1. You make a contribution of your property to fund a trust that pays California State University, Long Beach income for a number of years.
  2. You receive a gift or estate tax deduction at the time of your gift.
  3. After a period of time, your family receives the trust assets plus any additional growth in value.

Zero Tax Plan

It is possible to set up a lead trust that will help you transfer assets to your family with zero transfer taxes. The IRS assumes that a lead trust is only earning at the current low federal rate. If the actual investments of the trust produce a higher return than the payments made to California State University, Long Beach over the term of the trust, then the full value of the trust may be transferred to family with zero gift tax.

FLP/Lead Trust Plan

To assist your family even more, you might consider transferring your real estate or other assets into a family limited partnership (FLP) that will provide funds to your lead trust. The combination of the FLP, the lead trust and a gift exemption may permit the lead trust to pay income to CSULB for a number of years, then potentially transfer substantial assets tax-free to your family.

Increasing Payment Lead Trust

With increased volatility in the stock market you may also want to consider creating a lead trust that makes payments of increasing amounts to CSULB over time. Because the payments to us are determined in advance, your family benefits from any growth in the trust. Low payouts in the early years allow the trust to grow, which allows protection should the economy produce below-average returns in the future.

Contact Us for More Information

If you have any questions about making your gift, please contact us by clicking here to send us an email with your questions or comments.

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