If you hope to transfer assets to your heirs with limited taxation, consider establishing a charitable lead trust, which can help you realize substantial gift and estate tax benefits. Within a lead trust, the donor transfers assets to a trustee. The trustee makes annual payments to KU Endowment for a specific term of years (typically 10 to 25). When the trust term ends, the trustee transfers the principal plus any appreciation to your beneficiaries — typically, but not limited to, children or grandchildren.
In exchange for this gift, you receive a federal estate tax deduction equal to the estimated value of the annual trust payments to KU Endowment. Moreover, any appreciation in the assets during the term of the trust is not subject to additional gift or estate tax. Ultimately, you are able to pass appreciated assets to your heirs after a number of years, but pay taxes on only a portion of the assets transferred to the trust. As a result, you are often able to pass on a larger estate after tax than would otherwise be possible.
Lead trusts are fairly complex gifts, and you must consider many variables. Therefore, we highly recommend that you consult an attorney and/or financial advisor when considering this kind of gift, to help you reach your personal and financial goals.
The Office of Planned Giving staff
is ready to consult with you and/or your adviser about charitable lead trusts at KU Endowment, and to help with questions about other forms of charitable giving that may benefit you, your family and the University of Kansas.
The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.