Help Merrimack Now and Your Heirs Later
A charitable lead trust transfers the income from trust assets to Merrimack College for life or a term of years, after which the assets become available to you or your heirs. This enables you to immediately contribute to the support of higher education and later leave your heirs assets at greatly reduced tax rates. This impactful financial strategy allows you to provide for your loved ones while significantly contributing to Merrimack College’s mission of accessibility and excellence in education.
How it Works
Trust assets are often distributed at greatly reduced gift and estate tax rates. Depending on rates at the date of funding, you or your heirs can also receive significant appreciation in these assets with no additional tax consequences. Here’s the process:
- You transfer assets to a trustee of your choice and create a charitable lead trust.
- The trustee invests the trust assets. The taxation and benefits vary depending on the specific type of lead trust you establish.
- The trust makes payments (either a fixed percentage of the principal or a fixed dollar amount, depending on the type of trust) to Merrimack College for life or a term of years.
- When the trust terminates, the remaining principal is paid to you or your heirs.
This way, you can contribute to Merrimack College’s mission of providing quality, accessible higher education while also securing a financial advantage for you or your loved ones in the future.
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How You Benefit
- You may be able to reduce your gift or estate taxes; the tax benefits vary based on the type of trust you create. This potentially significant financial advantage can make a substantial difference in your estate planning.
- You avoid taxes from all appreciation on assets held within the trust. This means any increase in the value of your assets within the trust won’t be subject to additional taxation.
- You often may be able to set the amount and term of the payments to reduce or even eliminate transfer taxes when the principal reverts to you or your heirs. This provides flexibility and control in your financial planning.
- You have the satisfaction of making a significant gift to Merrimack College now that reduces the taxes due on transfers to you or your heirs later. Your contribution supports Merrimack College’s mission of providing accessible, high-quality education, creating a lasting legacy and a profound impact on the lives of countless students.
