Charitable Lead Trust

A donor may prefer to donate assets to a charitable lead trust and give COA the income from that trust. When the charitable lead trust ends, the trust property goes back to the donor or to someone the donor chose. Generally, these trusts provide substantial savings on gift taxes for the assets passing to heirs after the trust terminates.

It is possible to establish a charitable lead trust either during one’s lifetime or in a Will. A charitable lead trust can substantially reduce the estate taxes payable at the time of death. The value of the charitable interest depends on the length of the trust and the amount to be paid out each year. The saving in estate taxes may mean that family members receive substantially more than if the property were left directly to them.

For example, a donor could contribute $100,000 to a 6% charitable lead annuity trust that provides for the payment of $6,000 per year for 20 years to COA. The total gift to the College is $120,000 over 20 years.

After 20 years, the trust terminates and the trust assets are distributed to the donor’s children. However, the assets may pass to heirs free of estate or gift tax.



Benefits

  1. Substantial gift and estate tax savings or elimination while assets pass ultimately to your heirs.
  2. Provides a more immediate gift to College of the Atlantic.