Charitable Lead Trust


For donors with extensive assets, including those who would like to preserve closely held businesses for the next generation, a charitable lead trust may provide particular gift and estate tax benefits. During the term of the trust, payments, either fixed or variable, are made to the St. Catherine’s College (Oxford) Foundation. At the end of the period, the assets in the trust are transferred to the donor’s heirs.

Example: Mr. Thatcher has substantial assets and does not need additional income. He has several grandchildren at university and would like to leave them $1,000,000. After careful consideration of alternative plans, he decides to fund a charitable lead trust that will pay 7.5 percent to the Foundation for fifteen years.

The total distribution to the Foundation over the term of the lead trust for purposes specified by Mr. Thatcher is $75,000 per year for fifteen years or a total of $1,125,000. The assets remaining in the trust are distributed to the grandchildren. Any appreciation in the value of the assets passes to the grandchildren, free of estate and gift tax. The charitable lead trust can thus provide a way to make very significant charitable gifts without “disinheriting” loved ones.

Minimum gift: $100,000