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Charitable Lead Trust

Support the Opera Today, Your Heirs Tomorrow
The Charitable Lead Trust

The Charitable Lead Trust is considered an excellent planned giving option if you can place assets valued at $500,000 or more in the trust and would like to make significant annual gifts to the Opera while reducing the costs of preserving assets for yourself or transferring your wealth to your heirs. Securities, income-producing real estate or a combination of assets might be used to fund the trust.

A lead trust produces investment income for the Opera over a fixed period of time (often 10 to 15 years) before the remainder is passed to individual beneficiaries. You determine whether the annual payments to the Opera will be a fixed dollar amount (an annuity interest) [calculate fixed payments] or a fixed percentage of the trust assets, as valued annually (a unitrust interest) [calculate variable payments]. You may add assets to the trust under a unitrust arrangement, but not under an annuity arrangement.

Because the Charitable Lead Trust is very complex to arrange, it is in your best interest to retain a legal advisor who has previous experience with this particular gift arrangement and can evaluate its application to your personal goals.

The Non-Grantor Lead Trust is the most common form of the Charitable Lead Trust. The trust term is ten years or more. You may serve as a co-trustee, but not the sole trustee, of the trust. After the lead gift has been made, the remainder of the trust goes to beneficiaries that you designate. (Since you are the "grantor," a beneficiary is the "non-grantor.") When the payout rate and trust term are determined, discount tables published by the IRS are used to value the remainder interest in the trust. This value may result in substantially reduced estate or gift taxes even though assets have been preserved in the trust. However, you do not receive an income-tax deduction for the trust assets.

In the case of a Grantor Lead Trust, the remainder interest reverts to you, the grantor. You may designate the trust term and appoint the trustee(s) to manage the trust. Within prescribed limits, you may take an income-tax deduction in the year the trust is established.

If you establish a Charitable Lead Trust in your will, the value of the Opera's lead interest is deductible from your gross estate and the discounted value of the remainder is taxable to the estate.

Our knowledgeable staff is here to assist you and your financial advisors as you consider whether a Charitable Lead Trust benefiting The Santa Fe Opera is the right gift vehicle for you.

Please call Robert Meya, Director of External Affairs, at (505)986-5912 or Contact Us by email.

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