Lead Trust

Lead Trust

A charitable lead trust allows the donor to select annual or more frequent gifts of income from their trust to the Calumet Theatre. At the end of the term of years selected for the gifts, the principal of the trust reverts to the donor/trustor or to designated beneficiaries, perhaps to family members or, possibly, to charitable organizations.

An example of a lead trust: Mr. and Mrs. Say want to support the Theatre for the rest of their joint lives. They do not, however, want to ignore the needs of family members after the Say’s death. So, they arrange for a transfer of $1,000,000 to a trustee and direct that a portion (perhaps 6%) of the initial fair market value of the trust assets be paid by the trustee to the Theatre. Upon their deaths, the trust assets would revert to their children.

This gift arrangement is an important consideration for folks with large estates that place them in the higher federal income, gift and estate-tax brackets. Advice of tax counsel is recommended.