Charitable Lead Trusts
Charitable lead trusts are similar to charitable remainder trusts in every way except they reverse the recipients: (1) They provide funds for the Garden today; and (2) they make a generous gift to your loved ones in the future. The charitable lead trust allows you to transfer assets into a separately managed trust that will provide the Garden with payments for life or for a specific term of years. Upon its dissolution, the corpus of the trust reverts back to your loved ones.
A clever technique some donors employ is establishing both a remainder trust and a lead trust with cross beneficiaries. Here is how it works:
Case study: Establishing a charitable lead trust
John, age 67, puts $1,000,000 in assets in a charitable lead trust which provides the Garden with $50,000 a year in income. He also puts $1,000,000 in a charitable remainder trust administered by the Garden and paying his wife, Mary, $50,000 a year. He spreads his tax deduction over a 5-year period. John passes away at the age of 75. Upon his death, the assets in the charitable lead trust go to Mary and the assets in the charitable remainder trust go to the Garden. John benefited from a tax deduction on a $2,000,000 gift and moved half of it out of his estate. Mary and the Garden each received approximately $400,000 in income over an 8 year period. The assets moved to the control of the beneficiaries who can invest them and continue receiving the income.
The Santa Barbara Botanic Garden fosters the conservation of California's native plants through
our gardens, research and education, and serves as a role model of sustainable practices.
Santa Barbara Botanic Garden, Inc. is a nonprofit 501(c)(3) organization.
Our Tax ID number is 95-1644628.