Estate, gift, and generation-skipping taxes can consume 50%-70% of a large estate, thereby tremendously reducing the inheritance for your children or grandchildren. You can overcome this difficulty through a charitable lead trust. Lead trusts offer a way to make a philanthropic gift to Stonehill while protecting your wealth for future generations.
To determine how the gift to your heirs is calculated, use our gift calculator now. Click here.
Here's an example:
Phil and Ann would like for their grandchildren to inherit $10,000,000 from their estate. They know that, if their children receive the estate, the $10,000,000 inheritance is reduced to $5,200,000 by the 48% federal estate tax. If their grandchildren inherit the $10,000,000, they are subject to the 48% tax rate of the parents, and a 48% generation-skipping tax. Thus, the federal government would receive a "gift" of almost $7.3 million if the money was given directly to the grandchildren, thereby leaving the grandchildren only $2.7 million of the original amount.
This result can be avoided through a charitable lead trust. Phil and Ann can transfer the assets to the lead trust and the trustee can then invest the assets to generate income which provides a generous gift to Stonehill through a percentage of the assets for the rest of Phil and Ann's lives or for a set number of years. At the end of the term, the trust principal, which has grown in value, passes to their grandchildren free of estate or gift taxes.
Through such a plan, Phil and Ann can make a gift to Stonehill that is free of estate and gift taxes and which will also protect their assets.
For more information please call the Gift Planning Office at 508-565-1344.