What is a charitable lead trust and how does it work?

A charitable lead trust is an estate planning tool that allows you to provide financial support to charities and other non-profit organizations while preserving assets for your family or heirs. It works by transferring assets to a trust, which then pays an income to the charity or organization for a predetermined number of years. Once the term of the trust ends, the remaining assets are distributed to your family or beneficiaries. The trust is funded with assets such as stocks, bonds, cash, or other investments. The assets are placed in trust and invested to generate income that is paid to the charitable beneficiary for the term of the trust. At the end of the term, the remaining assets are either given to your beneficiaries or held in trust for them. In California, you can set up a charitable lead trust with the help of an estate planning attorney or financial planner. It is important to get advice from a qualified advisor since the trust has to comply with the specific requirements of state law. Additionally, you need to be aware of the tax implications such as gift taxes and state inheritance taxes when setting up the trust. Charitable lead trusts can be an effective way to provide financial support to charities and other non-profits while preserving assets for your family. It allows you to give to a cause you believe in while also preserving the assets you have accumulated.

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What is a charitable lead trust and how does it work?

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