http://thesmartgiver.com - How churches can attract major gifts.

People who need to reduce income taxes or pass assets on to the next generation with the least tax impact can use a lead trust to do both while also benefiting your church fundraising efforts.

The current poor economy provides a climate for some planned giving techniques to yield greater benefits than any time in recent history. One example is the charitable lead trust.

A lead trust is normally funded with income-producing assets. In one model, the trust pays a stipulated percentage for a certain number of years to a charity. At the end of the designated time frame, the trust assets either revert to the donor or are passed to children or grandchildren.

If you are a church leader interested in church fundraising, you'll want to pay special attention because lead trusts are funded with an average of five million dollars.

What could your church do with an income stream of 5-10% on 5 million dollars paid for 5 to 20 years?

A lead trust can be a solution for people who have specific problems or goals. For example...

--They've received a large bonus or just sold a business and need a large current tax deduction.
--They have a stock portfolio that has decreased substantially in value but feel certain that the stocks will rebound in time.
--They have a large estate that will be taxed at 50%+ and they want to pass their estate on with little or no inheritance tax.
--They have a large estate and don't want to dump significant wealth all at once on children who may not yet be financially responsible.

So why is a lead trust such a good deal now?

One of the components of the formula that computes the income tax deduction a person gets is the Applicable Federal Rate, AFR for short. Due to the decline in interest rates, the AFR has reached record lows. The lower the AFR the higher the tax deduction.

Charitable lead trusts have many applications and can simultaneously create major gifts for your church.