Charitable Lead Trusts
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What is a Charitable Lead Trust?
A Charitable Lead Trust is a planned giving arrangement where assets are placed into a trust that pays a fixed or variable income to Cure SMA for a specified period, after which the remaining assets are distributed to noncharitable beneficiaries.
- A Charitable Lead Trust involves transferring assets into a trust that provides a stream of income to Cure SMA for a predetermined period, either for a fixed number of years or for the lifetime of one or more individuals.
- After the specified period ends, the remaining assets in the trust are passed on to noncharitable beneficiaries, such as family members or other designated individuals.
- Charitable Lead Trusts can be structured as either grantor trusts or non-grantor trusts, impacting the tax treatment of contributions and distributions.
- This type of trust allows donors to support charitable causes during their lifetime while also potentially reducing estate and gift taxes on the transfer of assets to noncharitable beneficiaries.
Benefits from a Charitable Lead Trust:
- Estate and gift tax benefits: By transferring assets to a Charitable Lead Trust, donors can potentially reduce the taxable value of their estate and minimize gift taxes on transfers to noncharitable beneficiaries.
- Support for charitable causes: Charitable Lead Trusts provide donors with the opportunity to make significant contributions to Cure SMA and support causes they care about during their lifetime.
- Asset preservation: Charitable Lead Trusts can help preserve assets for future generations while still allowing donors to fulfill their philanthropic goals.
- Potential income tax deductions: Depending on the structure of the trust, donors may be eligible for income tax deductions for the present value of the charitable payments made to Cure SMA.
How your donation will benefit the SMA community
- Basic research to pave the way for new SMA muscle treatments and a cure
- SMA advocacy initiatives like caregiving access and transportation
- Improving standardized care for every person with SMA
“If it weren't for Cure SMA, we might not have the treatments in place that have helped my daughter to thrive while living with SMA. I'll forever be grateful and do what I can to support Cure SMA."
How a Charitable Lead Trust Works
A donor transfers assets, such as cash, securities, or real estate, into a trust, specifying that a fixed or variable income stream be paid to Cure SMA for a predetermined period. At the end of this period, the remaining assets in the trust are distributed to noncharitable beneficiaries, such as family members or heirs. The donor selects Cure SMA to receive the payments, and the trust is administered according to the terms outlined in the trust agreement.
The donor retains certain rights or benefits from the trust, such as the ability to revoke the trust or receive income from it during their lifetime, and is responsible for paying any taxes on trust income.
The trust is considered a separate taxable entity, and the donor does not retain any control or benefit from the trust. Income generated by the trust is taxed at the trust level, potentially allowing for greater tax efficiency.
Contact Us
If you have any questions, would like further information, or want help making your contribution then please contact us at [email protected] to get started.
Legacy giving typically takes many conversations and is not a fit for everyone. Conversations with Cure SMA about planned giving should be considered general in nature and intended to be used for informational purposes only. It should not be relied upon as legal, tax, accounting, or other professional advice. To determine how a gift or estate planning decision might affect your circumstances, it is expressly recommended that you consult an attorney, financial advisor, or other qualified professional.