Charitable Lead Trusts

  • Provide income to a charity for a term of years, and at the end of the term, the remainder is paid to your family.
  • A Charitable Lead Trust is primarily a gift-discounting technique that permits you to gift $1 of assets to your family members, and the IRS will view it as less than $1 (typically 30% – 60% less). This enables you to gift more than you otherwise would be able to.

Other Charitable Strategies Include

  • Private Family Foundations.
  • Donor Advised Funds.
  • Special Funds as part of a Local Community Foundation.

All will work to minimize taxation and create a lasting legacy. 

TAX PLANNING: Trust Planning to Minimize Taxes

Irrevocable trusts are used predominantly for two purposes: tax avoidance or asset protection. 

Tax Planning Trusts

The two most common taxes to avoid are income and estate taxes. While income taxes can be as high as 39 percent, there are many different types of trusts to minimize or avoid these taxes. They include:

  • Grantor Retained Trusts / (GRAT / GRUT)
  • Charitable Remainder Trusts / (CRAT / CRUT)
  • Charitable Lead Trusts / (CLAT / CLUT)
  • Qualified Personal Residence Trust (QPRT)
  • Irrevocable Life Insurance Trust (ILIT)
  • Qualified Domestic Trust (QDOT)
  • Intentional Grantor Trust (IGT)

Each of these trusts provide different tax saving opportunities.

Asset Protection Trusts

Asset protection trusts, are not as restrictive as tax planning trusts. They ensure the grantor is able to protect his assets from liabilities during his lifetime, from lawsuits, nursing homes, or other predators and creditors.

Unlike tax planning trusts, asset protection trusts, can allow the grantor to retain full control of their assets and even retain the right to change the beneficiary and the timing, manner, or method of distribution.

A careful balance however must be maintained to identify how much benefit the grantor wants to retain so as to avoid allowing his predators and creditors access to the same.

While the grantor is often giving up some rights to their assets, they do not need to give up any right to their assets for the benefit of their family. Assets transferred to irrevocable asset protection trusts can be used to support children, grandchildren or any other family members at any time the grantor deems appropriate.

The only requirement to achieve asset protection is that the grantor must give up access for him or her, up to the extent he wishes to protect it from creditors and predators.

Asset protection planning has gotten much more flexible and friendly over the last ten years and many clients favor it to ensure their lifetime of assets are not lost needlessly to lawsuits, nursing homes or other predators and creditors.

Planning for Widows or Widowers

Widows or widowers are faced with many new challenges they never chose. Being married for an extended period of time and then having to adjust to a life without a lifelong partner often creates much anxiety and concern.

We often see a tremendous amount of fear after the loss of a loved one and widow(er)s are often asked to make long-term decisions when they are not even clear what the next day looks like.

We highly recommend you not make any long-term decisions until after the first anniversary of your loss. You need someone you can trust, with a proven record of experience to protect and support you during this very difficult time.

We guide and support you along the way so you can be confident that you are making good decisions as you adjust to your life as a widow(er). There are a lot of emotional roller coasters that will occur and our experience will help support you to ensure you do not harm yourself in the long run.

Supporting and protecting you is what we do best. If you are a recent widow(er), schedule a complementary consultation to identify the many ways we help protect you along your journey.

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