Psst: Don’t forget about charitable lead trusts

Certain charitable clients may wish to structure a gift to charity so that they can provide financial support to their favorite charity for a period of time, with the remaining assets eventually going to family members or other beneficiaries. Keep in mind that a charitable lead trust (“CLT”) could be an attractive option for these clients.

A CLT is a charitable split-interest trust that can be created during life or at death, under a revocable trust or will. Your client agrees to make an irrevocable transfer of cash or highly appreciated assets to the trust. The lead income interest is paid to the charitable organization, and the remainder interest is transferred to a noncharitable beneficiary (e.g., the donor, the donor's family). The income interest can be in the form of a "guaranteed annuity" interest (a charitable lead annuity trust (CLAT)) or it is a "unitrust interest" (a charitable lead unitrust (CLUT)).

The team at Kitsap Community Foundation can help you stay up-to-date and work alongside you to evaluate whether and when a CLT is a good planning move for your client.