Charitable Trusts
You can make a legacy gift through two types of trusts: Charitable Lead Trust or a Non-Grantor Lead Trust.
Charitable Lead Trusts (CLTs) are simple in concept. But they also are complex gifts and estate-planning devices due to the many technical drafting requirements of the IRS. We recommend you consult with an attorney who specializes in trusts and estates with experience in CLTs.
With a Grantor Charitable Lead Trust created during your life, you are not taxed on any of the income earned by the trust, but it also does not provide a charitable income tax deduction. At the end of the trust term, the assets are distributed to the beneficiaries of the trust.
The principal advantage is that it can significantly reduce or even eliminate the gift and estate taxes on the value of the assets used to fund the trust, The charitable gift and estate-tax deduction is dependent on the value of the payments the Northshore Schools Foundation is to receive from the trust. The longer the term of the trust and the greater the amount of the payments results in a larger the charitable deduction. In addition, any appreciation in the Trust’s value will avoid transfer (gift and estate) taxes when the assets are received eventually by the beneficiary (beneficiaries).
There is no minimum gift amount for a donor to establish a Charitable Lead Trust for the Northshore Schools Foundation Endowment. The investment of the Trust is determined by the fiduciary who manages the Trust. The donor incurs costs for set up and management fees.
A Grantor Lead Trust provides a donor with a charitable income tax deduction for the present value of the payments that the Northshore Schools Foundation Endowment is to receive from the trust for a specified period. The donor, however, continues to be taxed on the income earned by the trust each year—including the amount distributed to the Northshore Schools Foundation. To avoid this negative tax result, donors often fund Grantor Lead Trusts with tax-exempt securities At the end of the trust term, the assets are returned to the donor.