Charitable Lead Trusts: A Legacy for Wheaton and your children
What is a charitable lead trust?
A charitable lead trust is a separately invested irrevocable trust you create by transferring cash, marketable securities, closely-held stock or income-producing property to a trustee you select. The trustee may be one or more individuals, a bank as co-trustee with Wheaton College or a combination of these. You designate Wheaton as the beneficiary of income for a specified period of years or for a period measured by a person's life. Upon completion of that period, the assets revert to beneficiaries you have designated in the trust instrument.
A unique feature of a charitable lead trust is that you may tailor Wheaton's income interest. A charitable lead unitrust pays an annual income equal to a percentage of the value of the principal, as valued annually. You select the percentage payout when you create the trust. A charitable lead annuity trust pays a fixed amount annually to Wheaton. You specify the fixed dollar amount when you establish the trust.
Is a charitable lead trust right for you?
If you would like the capital value of marketable or income- producing assets to remain in your family but would like to give Wheaton the income stream from the assets for a set period of time, then a charitable lead trust may be right for you. If you would like to pass assets to your children or other persons with a reduced gift tax liability, then a charitable lead trust may be right for you. If you would like to remove assets from your taxable estate, but still have them pass to your heirs during your lifetime or at death, then a charitable lead trust may be right for you. You probably should not consider such a gift arrangement for amounts less than $250,000 because a charitable lead trust involves administration costs and some start-up costs in the form of legal or financial advice.
Benefits to you
- You are able to provide a stream of income from your trust for a term of years, or your lifetime to Wheaton.
- You will qualify for a federal gift or estate tax deduction.
- The beneficiaries of your trust will receive all of the trust's assets when the trust terminates. Any asset growth that occurs in the principal of the trust will be distributed to your trust's beneficiaries free of gift or estate tax.
This page is maintained by The Office of Gift Planning. Last updated on 9/27/06.
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