Charitable Lead Trust

This trust pays income to your organization for a term of years or for the lifetime of the donor. When the lead trust terminates, the remaining balance is returned to the donor or to the donor’s heirs.

Donors who arrange their lead trusts to return the assets to themselves may claim a charitable income tax deduction when they make their gift, for the present value of the anticipated payments to charity. They are liable for income tax on the lead trust’s annual earnings.

Donors whose lead trusts distribute their remainder to children or other heirs receive no income tax deduction, but can gain significant gift and estate tax savings.