charitable lead trust

Charitable Lead Trust

A trust designed to reduce beneficiaries' taxable income by first donating a portion of the trust's income to charities and then, after a specified period of time, transferring the remainder of the trust to the beneficiaries.

Notes:

The whole idea of a charitable lead trust is to reduce taxes upon the estate left by the deceased. This is done by donating to charities from the estate until all taxes are reduced. Once this is accomplished, the estate is then transferred to the beneficiaries, who typically will face lower taxes.

Many different organizations offer information regarding the set-up of these types of trusts. Examples are universities, colleges, and non-profit societies.

See also: Beneficiary, Blind Trust, Charitable Remainder Trust, Estate, Estate Tax, Trust

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charitable lead trust

A trust that pays an income to a charity for a specific length of time then leaves the remainder of the trust to designated beneficiaries, usually family members. The purpose of the charitable lead trust is to reduce taxes on the estate of the deceased while maintaining the family's control of the estate's assets. Compare charitable remainder trust.