Gifts That Protect Your Assets

This type of gift arrangement allows you to direct gifts to AAT for a specified period of time and, in turn, receive either a charitable deduction now for gifts made in subsequent years or a reduction in gift or estate taxes on property you wish to pass to heirs.

Under the nongrantor plan, you irrevocably transfer assets to a trustee and provide that payments be made to LeMay – America's Car Museum for a certain number of years (or until the end of your or another's life). Then the principal is distributed to your children, grandchildren, or other heirs. The principal passes to your heirs at greatly reduced gift- and estate-tax rates and sometimes escapes them altogether. The charitable lead trust may appeal to individuals who wish to make a gift but retain the property in their family.

Charitable lead trusts (CLTs) are simple in concept but are complex gift- and estate-planning devices because of the many technical drafting requirements of the IRS. We recommend you consult an attorney who specializes in trusts and estates and has experience with CLTs.

There are two types of charitable lead trusts: the grantor lead trust and the more popular nongrantor lead trust, which was made famous by the late Mrs. Jacqueline Kennedy Onassis.

Nongrantor
Nongrantor Lead Trust Thumbnail
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See Diagram

Grantor
Grantor Lead Trust Thumbnail
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See Diagram

Most donors who use CLTs to accomplish their philanthropic and estate-planning objectives opt to create a qualified CLT. Many requirements must be met for a CLT to be qualified, but here are a few major considerations:

  • The payments (gifts) to AAT must be an annuity interest (fixed-dollar amount annually) or unitrust interest (fixed percentage of the fair-market value of the trust assets determined annually). There are no minimum or maximum payout rates.
  • The term of the trust (the number of years in which gifts will be made) must be measured by the life or lives of a person or persons living when the trust is created or a specified number of years.
  • The charitable beneficiary must be an organization described in the appropriate sections of the IRS Code. LeMay – America's Car Museum is a qualified charitable organization.
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Ensuring America's Automotive History is Preserved

1965 Lotus F2There are many factors that show America's automotive history is at risk:

  • Our education system emphasizes college-prep and focuses less on the applied arts, crafts and trades. Meaning less young adults are entering the workforce in the areas of restoration and preservation of vintage vehicles, including motorcycles, boats and planes.
  • Car services are becoming more popular and are competing with traditional car ownership.
  • Technological advances have made modern cars more reliable and longer lasting – reducing the need for local repair shops. Hyper-sophisticated safety and environmental requirements make it difficult for a local mechanic to maintain or repair vehicles.
  • Government sponsored museums are dedicated to art, technology, history, air and space, but there is no Smithsonian for the automobile. Many traditional car museums have a limited purpose beyond showcasing the collections of its founders. They're often static in nature, have limited cultural reference and unfortunately, often collapse with the death of their founders with collections sold and dispersed.
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