Stretching Family Control Over Charitable Interests

Many families have either a charitable remainder trust (CRT) or a charitable lead trust (CLT). Although these charitable vehicles offer significant advantages, providing tax savings and distributions back to the family while benefitting charities, they do have one inherent drawback: They cannot carry out a family’s charitable intentions beyond their limited terms. However, when a private foundation is established alongside either a CRT or CLT, the donor and the donor’s family can receive all the usual benefits of these trusts while retaining the family’s charitable control—potentially forever.

Let’s take a closer look at charitable lead and charitable remainder trusts.