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Your legacy starts
with a plan

Making a planned gift is a wonderful way to show your support and appreciation of Rutgers University and its mission while accommodating your own personal, financial and philanthropic goals.

Gift Planning

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Charitable Lead Trust

If you are looking for a way to pass on some of your assets to your family while reducing or eliminating gift or estate taxes, a charitable lead trust is an excellent option.

Charitable Lead Trust
Property
Lead Trust
Term of
Years
Income to RUF
Trust to Family
Charity image
Flowchart: Donor funds lead trust with property. Lead trust pays income to RUF for a number of years. Donor's family receives the remainder at the end of the trust term.

Benefits of a charitable lead trust

  • Receive a gift or estate tax charitable income tax deduction
  • Pass inheritance on to family at a reduced or zero cost
  • Establish a vehicle from which you can make annual gifts to charity

How a charitable lead trust works

  1. You make a contribution of your property to fund a trust that pays Rutgers income for a number of years.
  2. You receive a gift or estate tax deduction at the time of your gift.
  3. After a period of time, your family receives the trust assets plus any additional growth in value.

Contact us

If you have any questions about charitable lead trusts, please contact us. We would be happy to assist you and answer any questions you might have and to provide you with an illustration demonstrating your specific tax benefits.

Additional Information

Zero Tax Plan - It is even possible to set up a lead trust that will allow you to transfer assets to your family with zero transfer taxes. The IRS assumes that a lead trust is only earning at the current low federal rate. If the actual investments of the trust produce a higher return than the payments made to Rutgers over the term of the trust, then the full value of the trust may be transferred to family with zero gift tax.

FLP/Lead Trust Plan - To discount your gift to family even more, you may consider first transferring your real estate or other assets into a family limited partnership (FLP), which will fund your lead trust. The combination of the FLP, the lead trust and a gift exemption can permit the lead trust to pay income to us for a number of years and potentially transfer substantial assets tax-free to your family.

Increasing Payment Lead Trust - With increased volatility in the stock market, you may also want to consider creating a lead trust that makes fixed payments of increasing amounts to us over time. Because the payments to us are fixed, your family ultimately benefits from any growth in the trust. Low payouts in early years allow the trust to grow, thus allowing protection should the economy produce below-average returns in the future.

Grantor Lead Trust - A grantor lead trust permits you to transfer your cash or assets to a trust that will make gifts to charity for a number of years. At the end of the trust term, you receive the assets back from the trust.

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This site is informational and educational in nature. It is not offering professional tax, legal, or accounting advice. For specific advice about the effect of any planning concept on your tax or financial situation or with your estate, please consult a qualified professional advisor. Rutgers is an equal access/equal opportunity institution. Individuals with disabilities are encouraged to direct suggestions, comments, or complaints concerning any accessibility issues with Rutgers web sites to accessibility@rutgers.edu or complete the Report Accessibility Barrier or Provide Feedback Form.