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Charitable Lead Trust

BUILD A LASTING LEGACY THAT ALSO CREATES INCOME AND TAX BENEFITS.

A charitable lead trust lets you provide sustained philanthropic support to UCLA and benefit from significant tax advantages. When the trust ends, the assets pass to your loved ones.

BENEFITS

  • This gift arrangement allows you to place assets into a trust that generates regular distributions in support of UCLA for a period of years or your lifetime.
  • Your philanthropic impact is maximized because the university receives an assured flow of funds for a number of years.
  • Receive an immediate gift tax deduction for the present value of the distributions to UCLA, allowing you to pass assets to loved ones at a reduced transfer tax value.
  • When the trust ends, the assets are transferred to your heirs with low or no gift taxes.
  • The appreciation in the trust asset value is transferred to your heirs free of gift tax.
  • This may enable you to pass to your heirs a larger gift than might otherwise be possible.
  • The UCLA Foundation can serve as trustee of your lead trust and manage the assets, or you may decide to serve as trustee or to choose your own trustee.

TAX ADVANTAGES

  • A charitable lead trust makes annual distributions to UCLA. These payments can be a fixed amount or a fixed percentage of the trust value.
  • When you establish your lead trust, you also determine the number of years it will last and the percentage that will be used to make annual charitable gifts (the payout rate).
  • When the trust term ends, the remaining assets are transferred to your heirs.
  • A charitable lead trust is often funded with cash or with assets that can be expected to have a significant increase in value over the duration of the trust.
  • During the term of the trust, its income and capital gains may be taxable.
  • Any appreciation of the assets during the term of the trust is not subject to gift tax at the trust's termination.
  • Each year, the trustee will file a tax return listing the income and distributions of the trust.

HOW IT WORKS

  • Make a charitable contribution to The UCLA Foundation to establish your donor advised fund. The minimum amount to create a fund is $250,000 and the minimum balance is $50,000.
  • Receive an immediate charitable income tax deduction.
  • Make recommendations regarding gifts to UCLA and other charities with one simple form.
  • The total annual distribution amount should be at least 5% of the fund?s market value. At least 50% of the distributions should be directed to any area of UCLA.
  • Distributions may be made throughout the year (the minimum amount each time is $1,000).
  • Usually, the donor advised fund ends after the donor?s lifetime or when the balance is less than $50,000.
  • UCLA reviews your recommendations to ensure selected charities are eligible to receive donor advised funds.

Contact Us

800-737-UCLA (8252) • giftplanning@support.ucla.edu

UCLA's gift planning professionals are happy to provide you and your legal and financial advisors with personalized illustrations of the benefits that a charitable lead trust offers. Any information in this publication is not intended as legal, accounting, or financial advice. Please consult with your tax, legal, and financial advisors to ascertain whether this or other gift plans are in keeping with your own tax and financial needs. Conversations with the university's gift planning team are always confidential and never imply obligation.

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Read the latest news from campus: How campus units are collaborating to provide PPE for medical staff • UCLA researchers and global effort to test therapies • A summary of the "CARES Act" Congress signed into law and Gift Planning news. read more

New Tax Law Changes with the CARES Act

Congress recently passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that includes several charitable tax provisions to encourage giving. These include:

  • A new deduction for donors who do not itemize when filing their tax returns. If you do not itemize but make a cash gift to charity, you will be allowed to take a special tax deduction, up to $300, to reduce your tax liability.
  • An increase in the deduction limit up to 100% of a donor's annual income for cash gifts (previously the deduction was capped at 60% of annual income). If you make a gift, you will be able to deduct more this year.

If you are interested in learning more about these opportunities, please contact UCLA's Gift Planning team at 800-737-8252 or at giftplanning@support.ucla.edu. Please also let us know how we can help you during this time.