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

A charitable lead trust is a type of estate planning tool that allows a person to settle a trust fund for a charity. The trust will pay out an income to the charity over a period of time and the remaining trust fund will be returned to the person, or their family, when the trust ends. In Nebraska, a charitable lead trust is often used as a way for individuals to donate money to a charitable cause while obtaining a significant tax benefit. The trust allows the person to reduce the value of their taxable estate, providing a significant tax savings. When the trust ends, the gift to the charity is removed from the person’s taxable estate. When creating a charitable lead trust in Nebraska, the person will need to identify a trustee, such as a bank or financial advisor, who will oversee the trust. They will also need to determine a time period for the trust to be active, as well as the amount that will be distributed to the charity each period. Once the trust is established, the trustee will pay out the designated amount to the charity each period while deducting the amount of the payments from the person’s taxable estate. Upon expiration of the trust, the remaining funds that have not been distributed to the charity will be returned to the person. This provides the donor with a lasting legacy that benefits both them and the chosen charity.

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

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