Charitable Lead Trusts
Support AJC’s Mission Now and Enjoy Significant Tax Benefits
A charitable lead trust is an efficient estate-planning tool that can help achieve your estate and financial-planning objectives. When you designate AJC as the income beneficiary of your charitable lead trust, the annual income generated by the trust will go to support the current urgent mission of AJC, with the remaining assets eventually going to your family members or other beneficiaries.
You can establish a lead trust for a predetermined number of years and make annual income payments, or use it to fulfill a multiyear pledge. You can establish an endowment fund with your annual gifts from the income of the trust. After the trust term, the trust assets revert to you or, if you choose, are distributed to your heirs.
A charitable lead trust can be established either in the form of an annuity trust or a unitrust.
You should consult your estate and tax-planning advisors if you are considering establishing a charitable lead trust, since it can involve intergenerational transfers with many tax ramifications.
There are two types of lead trusts: the grantor lead trust and the non-grantor lead trust.
Grantor Lead Trust
When you establish a grantor charitable lead trust, you are entitled to an immediate income-tax charitable deduction equal to the present value of the income stream that AJC will receive during the life of the trust.
Non-Grantor Lead Trust
When a non-grantor trust terminates, the assets are transferred to someone other than you and/or your spouse, usually your children or grandchildren. When you create a non-grantor lead trust, you do not qualify for an income-tax charitable deduction. However, you will enjoy a substantial reduction in estate and gift taxes on the future transfer of assets to your heirs.