What is a charitable lead trust?

A charitable lead trust is a type of trust set up in Kansas which allows a donor to benefit a charity for a period of time without making a very large gift to the charity outright. It is a trust that pays a set amount of money to a charity or charitable organizations for a certain amount of time, and then the remainder of the trust is transferred to another beneficiary. This type of trust can be either a “grantor” trust, which is one where the donor retains control over the trust assets, or a “non-grantor” trust, where control is passed to another individual or institution. In a charitable lead trust, the charity or charity organization receives payments over a specified term, which are provided by the trust. The trust assets are managed by a trustee, who is responsible for making the payments during the term and paying any taxes on the trust assets. The remaining assets of the trust are distributed to the designated beneficiary at the end of the term. The charitable lead trust is an excellent way for a donor to benefit a charity while providing additional tax benefits. The payments to the charity are usually deductible from the donor’s income, and the remaining assets of the trust are not subject to estate or gift taxes. In addition, the charitable lead trust can help to reduce the donor’s overall tax burden.

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