Text Resize

Charitable Lead Trust

Charitable Lead Trust
Property
Lead Trust
Term of
Years
Trust to Family
Income to
Lead Trust
If you are looking for a way to pass on some of your assets to your family while reducing or eliminating gift or estate taxes, a charitable lead trust is an excellent option.

How it Works

  1. You make a contribution of your property to fund a trust that pays The Bishop's School 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 even possible to set up a lead trust that will allow you to 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 The Bishop's School 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 discount your gift to family even more, you may consider first transferring your real estate or other assets into a family limited partnership (FLP) which will fund your lead trust. The combination of the FLP, the lead trust and a gift exemption can permit the lead trust to pay income to us for a number of years and 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 fixed payments of increasing amounts to us over time. Because the payments to us are fixed, your family ultimately benefits from any growth in the trust. Low payouts in early years allows the trust to grow, thus allowing protection should the economy produce below-average returns in the future.

scriptsknown
THE BISHOP’S SCHOOL     7606 La Jolla Boulevard     La Jolla, CA 92037     (858) 459-4021
Founded in 1909 and affiliated with the Episcopal church, The Bishop’s School is an independent coeducational college preparatory day school for students in grades six through twelve who live throughout San Diego County.
© 2018 Crescendo Interactive, Inc. PRIVACY STATEMENT