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The Charitable Lead Trust as an Estate Planning Tool

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Planning your estate involves considering how you can leave a lasting legacy that will provide for your family members and the interests you care about most, in a way that maximizes the value of the gift they receive. There are many different estate planning tools that a skilled attorney can use to convey a gift to the cause of your choosing, either in a way that provides you an income tax benefit during your lifetime, or helps your beneficiaries by providing a gift that is not diminished by the gift and estate tax. An experienced New York estate planning attorney will be able to walk you through these options in more detail, and offer you the plan that will best suit your wishes and the needs of your family.

One charitable instrument you may want to consider is the Charitable Lead Trust, also known as the Charitable Income Trust. The Charitable Lead Trust (CLT) gets its name from the fact that the charity precedes, or “leads,” the ultimate trust beneficiary in receiving income from the trust. The charity of the donor’s choosing receives a percentage of the initial gift each year for a period of years, and at the end of the period designated by the donor, the remaining trust assets are conveyed either back to the donor or, more commonly, to a non-charity beneficiary of the donor’s choosing. The charity benefits by receiving a reliable source of income for a number of years, and the final recipient benefits by receiving a gift that is typically not diminished by the gift and estate tax.

Most grantors elect to have the CLT created upon their death, but it is possible to create a CLT during your lifetime. The length of time that the CLT exists before the beneficiary receives the remainder can be based on the lifetime of an individual, such as the donor, donor’s spouse, or a descendant of the donor, or can last for a set number of years. Unlike some charitable giving, the CLT does not provide an income tax benefit to the donor, but rather helps the donor avoid the gift and estate tax from applying to the amount used to set up the CLT. An estate planning attorney can explain in more detail how you and your heirs could benefit from a CLT.

If you are in need of assistance with your estate planning needs in New York, contact the dedicated and thorough Hudson Valley estate planning lawyers at Rusk, Wadlin, Heppner & Martuscello, LLP for a consultation, in Marlboro at 845-236-4411, or in Kingston at 845-331-4100.

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Kingston Office

255 Fair Street, P.O. Box 3356
Kingston, New York 12402

Phone: 845-331-4100
Fax: 845-331-6930

Marlboro Office

1390 Route 9W, P.O. Box 727
Marlboro, NY 12542

Phone: 845-236-4411
Fax: 845-236-3190

Rusk, Wadlin, Heppner & Martuscello, LLP, is located in Kingston, NY and Marlboro, NY and serves clients in and around Ulster County as well as parts of Orange, Dutchess, Columbia and Greene Counties as well as many surrounding areas.

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