Charitable Lead Trusts

Charitable lead trusts may be annuity (fixed annual payment) or unitrusts (fixed percentage of changing assets), but instead of making initial payments to the grantor the initial payments are made to a charity. A charity such as the South Dakota Parks and Wildlife Foundation are used for the charitable purpose you designate such as a favorite project, to purchase new park land or habitat, support a program, for the unrestricted use of the Foundation or for whatever purpose the grantor specifies. The payments are made for a fixed number of years, after which the grantor or his/her designee receives the trust assets.

Like remainder trusts, assets of at least $100,000 are generally required to establish a charitable lead trust.

Benefits include:

The grantor will qualify for a federal tax deduction of approximately 60% of the gift, depending on the payments to be made to the charity.
The South Dakota Parks and Wildlife Foundation will receive payments for a period of years specified in the trust agreement to be put to the purpose specified in the trust agreement.
The beneficiaries of the trust will receive all of the trustâ€™s assets when the trust terminates. Any asset growth that occurs within the trust will be distributed to the trust's beneficiaries free of gift or estate tax.

Any calculations or examples are for illustration purposes only and should not be considered legal, accounting, or other professional advice.

For more information, contact the Foundation.