Charitable Lead Trust

A Charitable Lead Trust helps you build a charitable fund with your community foundation during the trust’s term. When the trust terminates, the remaining assets are transferred to you or your heirs, often with significant transfer-tax savings.

A Charitable Lead Trust entitles you to a number of financial benefits. It shelters investment earnings from tax and offers gift, estate, and generation-skipping tax benefits. For example, trust assets are removed from your estate for estate tax purposes. You may also capture future gift tax deductions. However, at the time the trust is established, you may owe gift tax on the present value of your gift to the final beneficiary.

You have several options when establishing a trust.You can create a Charitable Lead Trust during your life or through your will. The trust contributes to charity through your community foundation—either for a number of years or for your lifetime. And, you select one of two types of Charitable Lead Trust. A Charitable Lead Unitrust makes annual distributions of a fixed percentage of the trust assets to the charitable fund you establish. If you create a Charitable Lead Annuity Trust, the charitable fund you establish will receive a fixed dollar amount each year.

During its term, the trust can be managed expertly by experienced trust professionals, which may help your trust investments grow over time. When the trust terminates, its final assets are transferred to those you designate; any growth in the trust passes to recipients, often with significant transfer-tax savings.

How it works:

• You transfer cash, appreciated stocks, real estate, or other assets into an irrevocable charitable trust.

• We set up a fund in your name, in the name of your family or business, or in honor of any person or organization you choose.

• Your Charitable Lead Trust pays the community foundation an annual amount to build a charitable fund. You designate the trust to exist for a specified number of years or until your death.

• You also designate your family or anyone you choose as the final beneficiary of your trust.

• If you choose, you can stay involved in the good works your gift makes possible— working with our professional program staff to support the causes and agencies you care about most.

• We handle all the administrative details, issuing grant awards to charities in the name of the fund you establish (if you prefer, grants can be made anonymously).

• Your gift can be placed into an endowment that is invested over time. Earnings from your fund are used to make grants addressing community needs. Your gift—and all future earnings from your gift—is a permanent source of community capital, helping to do good work forever.