A Family Trust
Allows You To:
- Maximize bequests to your children.
- Reduce or avoid estate and gift taxes.
- Make a gift to UT Health San Antonio.
How You Benefit:
- A family trust lets you time your bequests precisely.
- You can list any number of charities and all of your children as beneficiaries.
- You “freeze” the value of the assets used to fund the trust for tax purposes. If any estate or gift taxes are owed from the trust, they are calculated and may be payable at the time of the gift.
- Most of your gift to charity is made from what would otherwise be tax dollars.
How does it work?
- You place cash, stock, or other assets into a family trust (also known as a lead trust).
- The trust makes fixed annual gifts to UT Health San Antonio for as many years as you choose.
- At the end of the trust’s term, the remainder goes to your children.
- When the trust ends, all remaining assets—including all appreciation—are transferred to your children, free of any gift or estate taxes.
- Although your children may owe some capital gains taxes if the trust assets have appreciated, these taxes will not be payable until your children sell the assets.
- The charity receives an annual income for the entire term of the trust.
Planning Tips
- A family trust is best funded with assets that are not highly appreciated.
- A short-term family trust that runs for approximately five years can be a tax-savvy way to both fulfill a pledge to UT Health San Antonio and pass on assets to your children.
- Use multiple gifts to ease your family into their inheritance. For example, you could set up three different trusts with terms of 10, 15, and 20 years, instead of one trust.