Charitable Lead Trust

A charitable lead trust makes payments directly to Dartmouth for a specified term of years rather than to the donor or other charitable beneficiaries. When the term expires, the trust assets are transferred either back to the donor or to someone else, most frequently to younger family members.

There are two types of lead trusts. The income going to the charity must be either a fixed dollar amount (a charitable lead annuity trust) or a fixed percentage of the trust value as determined annually (a charitable lead unitrust). Due to differences in how taxes are treated, the annuity trust is used to pass assets to children; a unitrust to make gifts to grandchildren. A lead trust may be established during the donor’s lifetime or under the donor’s will.

A charitable lead trust may be a good program for you if you would like the capital value of marketable or income-producing assets to remain in your family but can afford to give the asset’s income stream to Dartmouth for a period of time. You might be particularly interested in this plan if you wish to leverage your available gift and estate tax credits for making gifts to your heirs and to reduce the overall estate taxes.

Charitable Lead Trust Benefits

  • Flexibility based on your objectives and assets.
  • Income, gift, and/or estate tax savings, depending upon the plan’s design.