Planned Giving: Charitable Lead Trust

Through this giving plan, you establish a trust that provides annual income to Scripps Research for a set period, after which the remaining trust assets are returned to you or your heirs. This plan can substantially lower your gift and estate taxes.

Charitable Lead Trust Plans

A charitable lead trust is the reverse of a charitable remainder trust. Rather than benefiting at the end of a trust's term, as with a charitable remainder trust, the Institute benefits at the beginning of a trust's term.

To establish a charitable lead trust, you transfer assets such as cash, securities, real estate, or other property into an irrevocable trust. The trust provides annual income to the Institute for a set term, then returns the assets to you or your heirs. The benefits — which include income tax deductions and reduced or eliminated gift and estate taxes — vary, based on the terms you establish for your trust and whether the trust is enacted during your lifetime or as part of your will.

You decide who will receive the remaining trust assets:

• Grantor lead trust: Returns assets to you or your spouse at the end of the term. With this option, you can take an income tax deduction for the value of the income donated to the Institute during the trust's term. The deduction is limited to 30 percent of your adjusted gross income, and the excess can be carried forward for a period up to five years. With this plan, you are taxed on all income the trust assets generate, including income donated to the Institute.
• Non-grantor lead trust: Passes assets to the heirs you designate when the trust dissolves. With this option, you avoid all taxes on income paid to the Institute, and the remaining assets — including any increased value — are distributed to your heirs free of gift and estate taxes.

For more information about charitable lead trusts, please contact Geoff Graham, Director, Planned Giving and Estates, at (858) 784-9365 or gcgraham@scripps.edu.