Do you want to benefit from the tax savings that result from supporting Angel Foundation, yet you don’t want to give up any assets that you’d like your family to receive someday? You can have it both ways with a charitable lead trust.
There are two ways charitable lead trusts make payments:
A charitable lead annuity trust pays a fixed amount each year to Angel Foundation and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year based on the value of the assets in the trust. With a unitrust, if the trust’s assets go up in value, for example, the payments to Angel Foundation go up as well.
You can use the following assets to fund a charitable lead trust:
- You can always use cash to fund a lead trust. Oftentimes, lead trusts are funded with cash in addition to stock or real estate.
- Appreciated Securities
- A charitable lead trust may be funded using a single appreciated security or a diversified stock and bond portfolio with high potential for growth over time.
- Closely Held Stock
- One of the most common assets used to fund a lead trust is closely held stock in a family business that has the potential to grow over the years.
- Real Estate
- Income-producing real estate is a perfect asset to fund a lead trust.