Charitable Lead Trust
Giving, then getting back
A PCAF Charitable Lead Trust operates in reverse to a Charitable Remainder Trust. It pays the income stream for life or a term of years to your PCAF donor-advised fund for ultimate distribution to your church and favorite charities, and pays the remainder to your heirs or other beneficiaries (or with certain kinds of CLTs, to you). A CLT can reduce estate and gift taxes on amounts left to heirs, or even zero them out. It also can reduce income taxes for donors who have exceeded the deduction limitations; and a certain kind of CLT enables a donor to reduce income tax by accelerating deductions to years when his or her income and marginal tax rates are higher than they will be in subsequent years. As with every complex gift strategy, when you reduce taxes, whether estate-and-gift or income, you effectively increase giving.
At the end of the trust term, assets are distributed one of two ways:
1) To the donor (Grantor Lead Trust)
2) To a named beneficiary or beneficiaries (Non-Grantor Lead Trust)
A CLT can be structured to commence during the donor’s lifetime or upon death.
Reduce Your Taxes
Give to a Non-Grantor CLT and reduce or zero-out gift and estate taxes, or reduce income taxes when the giving you desire exceeds deduction limitations. Give to a Grantor CLT and reduce income taxes in high-income years.
Simplify Your Giving
Start income streams to your church and other favorite Christian charities, but with flexibility to change charities and amounts over the term of the trust.
Advance God’s Kingdom
Regular charitable income payments, increased due to tax savings, increase and secure support for the advance of the Kingdom, and more broadly reveal the Kingdom.
How It Works
Propose a charitable lead trust, and fund it with a gift of $50,000 or more.
Choose from Foundation investment options, or propose an outside investment manager for the trust.
The PCA Foundation distributes regular income payments to your Foundation donor-advised fund, for ultimate distribution to your selected charities.
Receive regular reports of trust investment results and expenses, trust charitable distributions to your donor-advised fund, and fund distributions to charities you select.
Receive regular reports of trust investment results and expenses, trust charitable distributions to your donor-advised fund, and fund distributions to charities you select.
If you’re interested in opening a charitable lead trust or have further questions, contact our president, Tim Townsend (eastern U.S.), or our senior director of complex gifts, Greg Mattox (western U.S.), or fill out this form. If you are ready to propose a charitable lead trust (with no obligation), click to our Charitable Trust Instructions page and click on the Charitable Lead Trust option.
Additional Complex Services
We make a variety of donations possible.
Charitable Remainder Trust
When you give to a PCAF Charitable Remainder Trust, you take a deduction for the gift now, the trust pays you (or beneficiaries you name) an income stream for life or a period of years, and the trust pays the remainder to your PCAF donor-advised fund for ultimate distribution to your favorite charities. Advantages include increased income that is more secure and diversified, deferral of capital gains tax on the sale of any funding asset, and an immediate accelerated charitable deduction for a future gift.
Non-Cash Gifts
Appreciated private non-cash assets for giving include family and other privately-held businesses and investment funds in the form of S corporation, LLC, or limited partnership, stock options, real estate, and even cryptocurrency. Giving such assets produces the largest deductions, consisting of exclusion from capital gains (the equivalent of a deduction) plus an actual charitable deduction.
Charitable Estate Planning
Our ministry includes helping you think about stewardship of your giving. You decide how much income and wealth to allocate to giving, and we help you plan how, when, and what to give during life and through the estate you leave in order to convert the most tax dollars to giving.