If you are looking to make a substantial gift to The Kennedy Center 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 provides income to The Kennedy Center 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 The Kennedy Center 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 The Kennedy Center. The donor receives a charitable gift tax deduction for the present value of the annual income paid to The Kennedy Center. 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.
We recommend that you consult your tax advisor to determine additional tax benefits to which you may be entitled.
Please contact The Kennedy Center Vice President of Development at 203.365.8522, ext. 229 or email for further information.