If you are looking to make a substantial gift to Robin Hood over a period of years, own an income-producing asset that is appreciating, and want to ensure that those particular assets will ultimately pass to your loved ones, the charitable lead trust may be the best vehicle. A charitable lead trust is basically the opposite of a charitable remainder trust. It provides income to Robin Hood for a period of years, after which the trust principal is directed to you or to your named beneficiary or beneficiaries.

A charitable lead trust is created by irrevocably transferring cash, stock, income-producing assets, or a combination of these assets to a trustee to be managed and invested. The income (either a fixed-dollar amount or a fixed percentage of the trust principal as revalued each year) is paid to Robin Hood for a specified number of years. Upon the termination of the trust, the remaining trust assets, including any appreciation of the assets, will pass to the designated beneficiary or beneficiaries, with a substantial deduction on gift taxes in consideration of the income stream to Robin Hood. The donor receives a charitable gift tax deduction for the present value of the annual income paid to Robin Hood. This kind of trust has the ability to reduce or potentially eliminate gift tax on the future transfer of the assets to the remainder beneficiary. Additionally, the trust assets will have been irrevocably removed from your estate and will therefore not be part of your taxable estate and as such will not be subject to estate taxes.

To learn more about charitable lead trusts, please contact Katie Martin at Martin@robinhood.org or 212-227-6601.