Gifts that Pass More to Heirs
Charitable Lead Annuity Trusts
If you have a large estate and are worried about estate taxes, a charitable lead annuity trust (CLAT) is a powerful way to transfer assets to your heirs at a significantly reduced gift and estate tax cost while supporting Haverford with income payments for a period of years. A CLAT makes fixed (annuity) income payments to one or more charities for a fixed period of years. When the trust terminates, the assets pass to your heirs. CLATs qualify for a gift and estate tax deduction equal to the income payments made to charity, and when combined with your gift and estate tax exemptions are a great way to reduce the cost of intergenerational wealth transfers. In fact, the size and duration of the annuity payments to charity can be adjusted to completely eliminate the gift and estate tax due on a transfer to your heirs. Because of historically low IRS discount rates and other factors, this is the most advantageous time in decades to establish a lead trust.
Contact us for a detailed illustration of your projected benefits.
HINT: Fund your trust with cash or closely-held assets you expect to grow. In addition to your transfer tax savings, all of the appreciation that occurs in your trust during the term goes tax-free to your heirs!
Mary-Helen McCulloch, Esq. P'34
Director of Planned Giving