A charitable lead trust permits you to make a future transfer of assets to your heirs, while providing an income to BMM for a period of years.
During a specified number of years, a fixed or variable income is paid to BMM, depending on the type of trust you create. At the end of the trust term, the assets are passed to the heirs or to a trust for their benefit.
A charitable gift tax-deduction is available for the current value of the annual income payments to BMM during the trust term. Appreciation of the trust assets over the trust term is not subject to gift or estate tax.
You can establish a charitable lead trust with cash, publicly traded securities, income-producing real estate or a combination of these assets. Typically, a lead trust is most effective for high-net worth individuals who wish to fund the trust with assets valued at $500,000 or more.