Charitable lead trust

Charitable lead trust,

Definition of Charitable lead trust:

  1. A charitable lead trust works by donating payments out of the trust to charity, for a set amount of time. After that period expires, the balance of the trust is then paid out to the beneficiary. While this reduces the taxes owed by the beneficiary, once they inherit the remaining balance, it also presents them with other potential tax benefits, such an income tax deduction for charitable donations, and savings on estate and gift taxes. Additionally, it sets up a continuous way for the beneficiary and benefactor to make charitable contributions, without having to manually issue monthly payments.

  2. A charitable lead trust is a type of irrevocable trust designed to reduce a beneficiary's potential tax liability, upon inheritance. .

  3. Arrangement under which a qualified charitable organization receives income from an asset for a fixed period or during the lifetime of the donor. Upon the termination of the trust, the asset reverts to the donors estate. See also charitable remainder trust.

How to use Charitable lead trust in a sentence?

  1. These structures present beneficiaries with potential tax benefits, such an income tax deduction for charitable donations and savings on estate and gift taxes.
  2. A charitable lead trust signifies a type of irrevocable trust that aims to reduce a beneficiary's potential tax liability upon inheritance. .
  3. A charitable remainder trust is the polar opposite of a charitable lead trust, because instead of only making monthly payments to a charity, the trust can make a monthly payment to the beneficiary, as well.

Meaning of Charitable lead trust & Charitable lead trust Definition