Advisor Flipbooks

Two types of charitable lead trusts can help you achieve your estate planning goals. You can establish a CLT so that the remaining assets can be transferred to your heirs or to you. This feature allows you to further customize the trust to help meet your financial, family, and charitable giving goals. Consider these options: Grantor charitable lead trust –This type of CLT passes the remaining assets back to you at the termination of the trust. A grantor CLT is designed to provide a current income tax deduction while retaining assets for your future use. Since trust income is taxable to the grantor, consider tax-managed equity and municipal bonds in the investment strategy. Non-grantor charitable lead trust –This type of CLT passes the remaining assets to your heirs at the termination of the trust. A non-grantor CLT is designed to help transfer assets from your taxable estate. Here the trust income and the charitable deduction are at the trust level. Consider tax-managed equity and municipal bonds in the trust's investment strategy. In addition, both non-grantor and grantor CLTs can be set up in one of two ways: Charitable lead annuity trust (CLAT) –This type of trust pays a fixed distribution (e.g., $25,000) to a charity every year based on the trust's value at the time of funding. Charitable lead unitrust (CLUT) –This type of trust pays a charity a variable income distribution (e.g., 5%). The amount will increase or decrease based on the annual valuation of the trust. Is a CLT right for me? People who choose a CLT typically want to balance their philanthropic interests with other considerations, such as: • A need for an effective tax planning tool to help produce a significant income tax deduction or to save on estate taxes when passing assets to heirs • A desire to maintain control of principal assets • The ability to forgo income from those assets for a period of time How can a CLT benefit me, my family, and my charity? The greatest philanthropic benefit of your CLT is that it provides income to a charity that is important to you while also helping to meet your income tax and estate planning needs. Other potential benefits include: • Your money is working for you and your heirs. • You maintain control over the investment of your assets. • You may enjoy significant income tax benefits, and possibly estate and gift tax benefits. • There is a possible generation-skipping tax charitable deduction. • You can help maximize wealth transfer while reducing transfer taxes. • You establish a legacy by providing income to your favorite charities in your family name. What is the role of my advisor and SEI Private Trust Company (SPTC)? Your advisor can work with you to: • Integrate your CLT with your other estate and financial plans • Help determine which type of CLT best meets your needs • Recommend the most appropriate investments to fund the trust • SPTC can serve as a discretionary trustee, which includes investment authority and performing all of the administrative activity, recordkeeping, and required tax preparation. SPTC can also serve as trustee or as your trustee's agent and perform administrative activity, recordkeeping, and tax preparation. In any case, SPTC will work closely with your advisor in the transfer of assets and administration, and if applicable, the trust management.

• Cover