Ken Himmler.com

A charitable lead trust (CLT) is essentially a charitable remainder trust in reverse. First, the charity receives an income stream (the income interest), then, at the end of the specified trust term, which can be for a term of years, for the lifetime of the donor, or for the lifetimes of the donor and the donor’s spouse, any income and principal remaining in the CLT (the remainder interest) can either revert back to the donor or pass to other non-charitable beneficiaries named in the trust.

For more information on charitable lead trust’s and other charitable deductions, you can go to http://kenhimmler.com.

A CLT can be funded in two ways:

• Inter Vivos – An inter vivos CLT is funded during the grantor’s life.
• Testamentary – A testamentary CLT is funded at the donor’s death through the donor’s will. As long as the CLT is included in the donor’s taxable estate, the estate can deduct the net present value of the income stream granted to the charity. Minimizing estate taxes is the primary motive for funding a CLT at death.

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