Charitable trusts fulfill a myriad of objectives: (1) they allow you to reduce estate taxes; (2) eliminate or decrease capital gains; (3) obtain an income tax deduction and (4) best of all benefit The Lighthouse instead of the Internal Revenue Service.

The following explains generally about the different types:

1. Charitable Lead Trusts

One type of charitable trust, a charitable lead trust, is an irrevocable trust to which you would transfer property.  Thereafter, the trust makes annual payments for a specific period of time to a charity, like The Lighthouse.  After the specified period of time has passed, the balance of the trust assets, the “remainder,” pass to non-charitable beneficiaries, such as your children or grandchildren.

This type of trust is appropriate for:

• delaying a grandchildren’s inheritance until a more appropriate time;
• combining your income, estate, gift, and charitable goals; and
• provide a lasting gift to The Lighthouse.

Especially if you have a sizeable estate, establishing a charitable lead trust can help you fulfill your philanthropic goals in your lifetime and provide for your children or grandchildren for their future.

2. Charitable Remainder Trusts

Another specific type of trust, a charitable remainder trust, is an irrevocable trust that pays you income annually for a term of years, then passes to The Lighthouse upon your death. 

The charitable remainder trust allows you to set aside a portion of your assets as a gift to The Lighthouse while you maintain- and even enhance!- your present and future income.

This type of trust is a great way for you to:

• increase the cash flow from appreciated assets;
• bypass an onerous capital gains tax that would otherwise be due upon the sale of appreciated securities;
• generate an income tax deduction for you in the year the trust is established;
• save estate taxes and probate costs; AND
• provide a lasting gift to The Lighthouse.

If you would like more information about specific benefits or a personalized proposal, please contact Jen Miller, Director of Development, at (312) 997-3643, or by e-mail at jennifer.miller@chicagolighthouse.org.