Leaving a Legacy: Charitable Lead Trusts

You want to leave an inheritance for your family (Proverbs 13:22). Even if you wait until the future to make a gift to your children, every gift has a cost. How can you make gifts to your family without paying excessive taxes?

When you think about transferring a specific block of stock, real estate, or other property to your family during your lifetime, you may be concerned about the potential gift tax due. If you have a taxable estate, you may also be concerned about future estate tax. You need to find a way to make gifts to your family both now and in the future without paying substantial tax.

If you identify with any of these situations, a Family Lead Trust may be a possible solution. A Family Lead Trust can help you achieve your goals of passing on property to your family while reducing or even eliminating gift or estate taxes.

There are several ways to create a Family Lead Trust to meet your needs. Below are two plans (one for during your lifetime and one for your estate) that will permit you to give your family stock, real estate, or other appreciated assets and lessen the burden of gift or estate tax. In addition, a Family Lead Trust will provide a stream of income for a charitable organization such as Answers in Genesis, enabling you to share in the biblical authority mission far into the future.

Rather than making a current gift to your family, which often comes at a high gift tax cost, you can transfer your property to fund a Family Lead Trust. The trust will pay fixed income to AiG for a period of time, and then the property will go to your family at a substantial tax savings. The benefit of this plan is that it provides a charitable gift tax deduction that will reduce or even eliminate the cost of making the gift to your family. Better yet, you can select the appropriate term of years for the trust, enabling you to schedule when the principal will pass to your family. You will have the satisfaction of knowing that you helped Answers in Genesis, made a significant gift to your family, and received excellent tax benefits.

Another way to make a future gift to your family is through a Testamentary Lead Trust. A Testamentary Lead Trust is simply a trust funded at your death. It pays income to AiG for a period of time, after which the trust assets go to your family. The benefit of the Testamentary Lead Trust is that it provides you with a charitable estate tax deduction, reducing your estate transfer tax. This plan works especially well for scheduling inheritance for children and grandchildren to begin at an age of financial responsibility.

God ordained government, and He commands us to pay “taxes to whom taxes are due” (Romans 13:7). But taking the time to understand the government’s rules will help you to avoid paying undue taxes and to maximize your giving. Planning ahead will benefit your estate, your family, and ministries like AiG!