A charitable lead trust transfers the income from trust assets to The Nature Conservancy for life or a term of years, after which the assets become available to you or your heirs. This allows you to immediately help protect nature and later leave your heirs assets at greatly reduced tax rates.
How It Works
Trust assets are often distributed at greatly reduced gift and estate tax rates. Depending on rates at the date of funding, you or your heirs can also receive significant appreciation in these assets with no additional tax consequences.
Here's the process:
- You transfer assets to as trustee of your choice (TNC will not serve as trustee) and create a charitable lead trust.
- The trustee invests the trust assets. The taxation and benefits vary depending on the specific type of lead trust you establish.
- The trust makes payments (either a fixed percentage of the principal or a fixed dollar amount, depending on the type of trust) to TNC for life or a term of years.
- When the trust terminates, the remaining principal is paid to you or your heirs.
How You Benefit
- You may be able to reduce your gift or estate taxes; the tax benefits vary based on the type of trust you create.
- You avoid taxes from all appreciation on assets held within the trust.
- You often may be able to set the amount and term of the payments to reduce or even eliminate transfer taxes when the principal reverts to you or your heirs.
- You have the satisfaction of making a significant gift to TNC now that reduces the taxes due on transfers to you or your heirs later.
Meet Tom Cook
When Tom Cook faced a difficult health journey, he turned to nature for solace.