Phil and Alicia had a successful business developing real estate. They realized that their assets provided more income than they needed for their family's current living expenses; however, they wanted to maintain their assets to ensure their grandchildren would have resources for college. One of their first charitable gifts had been a gift of appreciated stock. They discussed their circumstances with their financial advisor, who showed them how they could make a charitable gift now and see the results while they were still here.

Phil: "It really has been a wonderful ride. When we first started developing residential housing, we had no idea where it would all lead. We were fortunate to make some choices that really set up the company for success."

Alicia: "We have been able to provide a wonderful home for our children, but they are off on their own now with their own families. While the company has grown, our immediate needs have shrunk."

Phil: "Not too long ago, we sat down with our kids and our advisors and talked about what was important to us and what we really wanted. Our kids are all doing fine on their own. We don't need more. Our attorney told us about something called a charitable lead trust funded with some of our excess assets."

Alicia: "It sounded great to us - it provides some tax benefits and part of our estate remains intact for our grandchildren's educations. While we are helping to make a difference in other people's lives, we're able to do it while we're here and can be part of it. It really feels good to see firsthand how the income from the trust can make a difference."

Phil and Alicia wanted to contribute $250,000. They placed a sufficient amount of income-producing commercial property into a charitable lead trust (CLT) that would make annual payments of $25,000 to charity over ten years. This will provide the charity with $250,000 in total and, after ten years, the assets will pass to the donor's heirs. Because the gift tax deduction and the amount subject to gift tax is determined at the time the assets are contributed to the CLT, any appreciation of the assets that takes place during the term of the trust is not subject to additional gift or estate tax.