Charitable Lead Trust

A charitable lead trust is a way you can support Seattle Foundation for a number of years and pass on your assets to your family while eliminating gift or estate taxes.

With a charitable lead trust (CLT) you can make significant charitable gifts both now and in the years to come while providing for the eventual transfer of substantial assets to individual beneficiaries. Depending on how it is structured, a CLT also enables you to achieve a variety of tax, financial and estate planning objectives.

Why consider a CLT?

The donor can provide a stream of income to one or more charities for a set period of time (typically, for a CLT this is 100% Seattle Foundation but we will consider an exception for larger trusts - see more below).
The charity receives funds right away, unlike other vehicles where they must wait.
Gift and estate tax reduction: A CLT can significantly reduce the taxable value of the assets ultimately passed to heirs.
Income tax deduction (in some cases): If the trust is structured as a grantor CLT, the donor may receive an upfront income tax deduction based on the present value of the charitable interest. This does not apply to nongrantor CLTs.
Beneficiaries receive remainder: After the trust term ends, the remaining assets (sometimes grown in value) pass to heirs or other non-charitable beneficiaries with reduced or no estate/gift tax. This allows the donor to support a charity and still keep wealth within the family.
A CLT is particularly attractive when IRS Section 7520 rates are low because the present value of the charitable interest (which is deductible for tax purposes) is higher. This means more of the trust's future growth can pass to heirs with minimal tax.

What are our fees for a CLT?

Seattle Foundation offers highly competitive rates to serve as trustee for a CRT. Fees are annual, as follows:

.25% Trustee Administration Fees (paid to Seattle Foundation)

$400 Tax Preparation & Filing Fee (paid to Seattle Foundation)

.60% Investment Management Fees (paid to BNY for trust asset management)

For most CLTs, Seattle Foundation must be 100% beneficiary. However, for trusts funded with more than $1mil in assets, we may consider additional charitable beneficiaries on a case-by-case basis. Contact us to learn more.

Gift Date	Month: Day: Year:
Please enter a valid gift date
Gift month field is required
Gift day field is required
Gift year field is required
Rate of the Month
The current Rate of the Month (AFR) will display in the drop down box. Choose one of the three rates offered.
Donor
Donor is required
Beneficiary
Enter the name of the Beneficiary. You may use such titles as "Mr.", "Mrs.", "Dr.", "Rev.", "Jr.", etc.
Beneficiary is required
Term of Years	Years
Enter the term of years the trust will last, i.e., distribute income to the named beneficiary(ies). The term cannot exceed 20 years.
Term of years is required
Trust Amount $
Please enter a valid property value
Property value is required
Enter the amount of cash or the fair market value (FMV) of the asset(s) used to fund the CGA. For assets such as real estate, closely-held stock and other hard to value assets, the FMV is the appraised value of the property on the date of the gift.
Payout	%
Trust payout is required
Payout must be between 5% and 50%
Enter the percent income payout to the donor. You must select a trust percent payout of 5% or more.
Payment Frequency
Select either monthly, quarterly, semiannual, or annual income payments to the beneficiary(ies) of the income. The choice of payment frequency does affect the amount of the charitable deduction as the more frequent the payment (i.e. monthly as opposed to annually), the smaller the donor's tax deduction.
Under the Internal Revenue Code, the charitable income tax deduction must be at least 10% of the initial value. The payout amount has been lowered to qualify under the IRS 10% deduction test. This calculation includes a safety factor of 0.04%. The deduction factor will be 0.10040 or greater. The Maximum Payout Rate by Crescendo 10% Deduction Test: cres_calc_maxrate10
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