Charitable Lead Trust
The charitable lead trust is an arrangement that provides a stream of income to Augustana College, usually for a number of years. At the end of the term, the trust assets either return to you (known as a grantor lead trust) or transfer to your beneficiaries, most often children or grandchildren (known as a nongrantor lead trust). Here we will discuss the grantor version.
Grantor Charitable Lead trusts (Annuity or Unitrust)
- At the end of the trust period, assets return to the grantor.
- A lead annuity trust distributes a fixed dollar amount to Augustana each year.
- A lead unitrust distributes a percentage of the annual value of the trust to Augustana; additional contributions are acceptable.
- Donor may claim a charitable income tax deduction but must pay taxes on income distributed to the charity each year.
What are the Benefits?
- Donor makes a generous gift to Augustana while retaining an asset for future use or to pass on to future generations.
- Donor may claim an income tax charitable deduction (but is liable for taxes on income distributed to the non-profit). This may be especially useful for donors who are in a much higher tax bracket the year the gift is made than they expect to be during subsequent years of the trust.
What's involved in setting it up?
To establish a grantor charitable lead trust, the donor:
- Executes a trust agreement. Augustana can provide you and your attorney with sample documents;
- Chooses a trustee for the trust (Augustana; a designated individual; a bank);
- Has the assets transferred to the trustee, who holds and manages them as an individual fund.
If you would like to learn more about Charitable Lead Trusts and including Augustana in your estate provisions, please contact:
Stephen M. Davis, Assistant Vice President of Legacy Planning
639 38th Street
Rock Island, IL 61201
(800) 798-8100 x7587