Individuals with larger estates can use a charitable lead trust to benefit the U.S.ENGLISH Foundation and pass principal to family members with little or no tax penalty.
It is essentially a reversed Charitable Remainder Trust, which means that U.S.ENGLISH Foundation would receive income during your lifetime and the residual of the Trust would go to your heirs.
It works like this: You transfer assets to a trust that provides payments to the U.S.ENGLISH Foundation for a term of years. Then the trust principal goes to your children, grandchildren, or others free of, or at greatly reduced, federal gift and estate tax.
Like a Charitable Remainder Trust, Charitable Lead Trusts offer current income tax deductions and a reduction of capital gains taxes. The only difference is that in the Charitable Lead Trust flip-flops the parties involved. Charities become the income beneficiaries, receiving a steady stream of income during the owner's lifetime.
At the owner's death, named beneficiaries then receive the bulk of the Charitable Lead Trust's assets. And just like the Charitable Remainder Trust, Charitable Lead Trusts also receive the same preferential tax treatment.
Disclaimer: U.S.ENGLISH Foundation does not render legal, tax or other professional advisory services. Advice from an attorney and other professional advisors should be sought when considering charitable giving.
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