Advanced Planned Giving Topic: Lead Trust Options in 2010?

If you are not a glutton for planned giving technical stuff, you might want to skip this one.  Attorney Martin Shenkman, quoted in the Forbes Article, posted a huge commentary on 2010 estate planning questions.   Here is a link to it:—is-it-real~#_Toc250556915

For charitable planners, here is a very complicated, interesting take on the remote possible use of Lead Trusts for some tax advantages in 2010 from the above Shenkman web piece:

Lead Trust (CLT) Planning Under Repeal

Charitable Lead Trusts (CLTs) could present an interesting opportunity. Maybe! With a CLT you can gift a large sum of money to your children and reserve a periodic payment to a charity for an intervening period. This charitable interest reduces the value of the gift to your children dramatically.  Under 2009 law you cannot set up a CLT for grandchildren unless it is structured as a unitrust. This means the charity gets a percentage of the value of the CLT assets each year, instead of a fixed amount.  That squeezes some of the “vig” out of the plan. The reason for this had been that you cannot allocate GST exemption to a CLT using annuity payments (called a CLAT). Well, if there is no GST tax can you now do CLATs for grandchildren since there is no GST tax? Some practitioners suggest formula clauses to divide the CLT assets depending on the outcome of future tax legislation. Other advisers suggest using a disclaimer so that if the law becomes clear within 9 months of funding the children can disclaim and the CLT remainder can go to grandchildren if the GST tax is not re-enacted, or if re-enacted is not retroactive. Other advisers are looking for Advil.

One comment

  1. Jonathan thanks for the plug to my estate tax repeal article. I have a lot of planned giving materials on the site, including power points, speach handout materials, etc. There are enough materials to enable someone to give a substantial planned giving speech with little prep. I’m happy for you to link to them and make them available to readers. I’ve also written fundraising books for National Multiple Sclerosis Society and Michael J. Fox Foundation for Parkinson’s Research (all proceeds go to charity). You might want to link to those on

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