What is a charitable lead trust (CLT)?
A charitable lead trust (CLT) is an irrevocable (unchangeable) trust that provides regular donations to a chosen charity, such as St. Jude.
CLTs are sometimes referred to as charitable lead annuity trusts.
How does a charitable lead trust work?
When you establish a CLT, a predetermined amount of the trust’s assets are given to a charity, like St. Jude, annually for a set period of time.
The remainder of the funds can be transferred to the trust’s non-charitable beneficiaries, such as family members.
Charitable lead trusts:
There are two main types of charitable lead trusts: grantor charitable lead trusts and non-grantor charitable lead trusts.
Grantor charitable lead trust
A grantor charitable lead trust is one in which the grantor, or the creator of the trust, is considered the owner of the trust assets. Because the grantor is the owner, they can then take an immediate charitable deduction on their taxes. This dedication is based on the value of future donations to their charity of choice. However, the grantor is then responsible for paying taxes on the assets in the trust.
Non-grantor charitable lead trust
With a non-grantor charitable lead trust, the trust itself is considered the sole owner of the trust assets, making the grantor ineligible for an income tax deduction. Instead, the trust itself pays taxes on any undistributed income in the trust.
- Setting up a CLT may reduce or even eliminate gift and estate taxes on trust assets passing to family. Future gift assets to your loved ones will be valued on the date you establish the trust. So if the gift appreciates in value, your family wouldn’t have to pay taxes on it later.
- You may not be taxed on income earned by the trust. Other tax benefits vary and you should ask your financial advisor for more information.
- St. Jude or other favorite charities can benefit from receiving annual distributions from the trust and you can see the impact of your gifts.
- You have a large estate that would be subject to gift tax and estate tax.
- You have assets you want to keep in the family and have a likelihood of significant appreciation in the future.
- You want to make significant annual gifts to a charity while you are living and also pass assets to beneficiaries at a potentially lower gift or estate tax cost.
ALSAC/St. Jude Children’s Research Hospital does not provide tax, legal or accounting advice. This material is prepared and made available to you for informational purposes only and is not intended to provide or be relied upon for tax, legal or accounting advice. You should always consult a tax professional to determine your particular tax benefits that may result from any particular type of gift to charity.
Tax ID Number:
We are a tax-exempt, charitable institution listed in the Federal Internal Revenue Service Publication #78, "Cumulative List of Organizations," revised IRS Code 501(c)(3).
Why donate to St. Jude?
Families never receive a bill from St. Jude for treatment, travel, housing or food — so they can focus on helping their child live.
When St. Jude opened in 1962, childhood cancer was considered largely incurable. Since then, St. Jude has helped push the overall survival rate from 20% to more than 80%, and we won't stop until no child dies from cancer.
Every child deserves a chance to live their best life and celebrate every moment. When you support St. Jude, you can help make cures possible for kids with cancer. Together, we can save more lives.
Our Gift Planning department has a representative in your area who can provide further information or help you prepare the right questions to ask your financial advisor to determine what type of planned gift may be right for you.
Email firstname.lastname@example.org, call (800) 395-1087, or fill out the form below, and a St. Jude representative will contact you.
Have you left St. Jude in your will or estate plan?
As an acknowledgment of your generosity when you give a gift to St. Jude through your will or estate plan, you become a member of the Danny Thomas – St. Jude Society, and we recognize your commitment to the mission of St. Jude in a variety of ways.
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