A charitable lead trust likewise creates two interests, one for you and one for a charitable organization. The charitable organization's is a present interest in income from the trust for a term of years. Yours is the remainder interest in the assets when the trust terminates; often the assets are distributed to your childrenor grandchildren.
Under current law, you may deduct from taxable income up to 50% of your adjusted gross income for gifts of cash to charitable organizations in any year. If your current income is larger than you require and you wish to make a gift to your parish, the Archdiocese or Catholic Charities for more than 50% of your annual adjusted gross income, the charitable lead trust may appeal to you.
Charitable lead trusts can be effective planning tool for persons whose estates will be subject to the highest estate tax rates.
