The Charitable Lead Trust (CLT) is often thought of as the inverse of a Charitable Remainder Trust. While this analogy is useful to some extent, there are sufficient differences between the two types of trusts as to warrant treating them as unrelated.

Due to the extremely technical and complex nature of the Charitable Lead Trust, we will only examine the most basic elements that give them their unique nature.

Key Elements of a Charitable Lead Trust

(1) The Charitable Lead Trust is an Irrevocable Trust;

(2) The CLT provides an Income stream to a qualified Charitable Organization;

(3) The Income stream must either be in the form of an Annuity (a sum certain paid not less often than annually), or a Unitrust (based on a percentage of the fair market value of the trust assets);

(4) The Income stream is paid over either a Term of Years; the Lives of one or more persons; or a combination of both;

(5) At the end of the applicable period, the trust assets are paid either to the Grantor (the original Donor), or to one or more non-charitable beneficiaries;

(6) There are no minimum or maximum annuity or unitrust payout requirements (unlike the CRT);

Additional features of the Charitable Lead Trust, including current Income Tax deductions for amounts going to qualified Charitable Organizations, and Estate and Gift Tax considerations for trust assets passing to the Donor or a non-charitable beneficiary, are based on technical and overly complicated IRS rules and regulations.

It is best to address these additional issues on an individual basis, rather than on this web-page. As always, we welcome the opportunity to speak with you in person regarding whether or not such charitable giving techniques would be of value to you and your family.