Charitable Lead Trusts
The charitable lead trust helps donors reduce gift,
estate and generation-skipping taxes in passing assets on to heirs.
A lead trust is essentially the opposite of a remainder trust.
A donor places assets in trust and specifies that a
fixed amount or fixed percent of the value of the trust will be paid
to charity (such as the Delaware Community Foundation) each year for
a period of years. At the end of the trust term, the principal of
the trust passes intact back to an individual beneficiary.
The income tax resulting from a lead trust depends
largely on whether the trust is drafted to be a grantor or
non-grantor trust. As a rule, if the donor or the donor's spouse
will receive the remainder, the trust is a grantor trust; if the
donor's heirs will receive the remainder, then the trust is a
non-grantor trust.
Consult your financial advisor to determine if a
charitable lead trust is a wise gift arrangement for you, or contact
Jane Vincent, Senior Vice President for Development, at 302/504-5237
or jvincent@delcf.org.
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