Gift Range: $100,000 or more
A nongrantor lead trust created during life does not provide you, as the donor, with a charitable income-tax deduction, but neither are you taxed on any of the income earned by the trust. At the end of the specified trust term, the assets remaining in the trust are distributed, usually to children or grandchildren.
The principal advantage of the nongrantor lead trust is that—because of the charitable gift- and estate-tax deduction attributable to the value of the payments the Lewis County Historical Society is to receive from the trust—it can significantly reduce or even eliminate (depending on when it is set up) the gift and estate taxes on the value of the assets used to fund the trust. (The longer the term of the trust and the greater the amount of the payments to the Lewis County Historical Society, the larger the charitable deduction.) In addition, any appreciation in the trust’s value will avoid transfer (gift and estate) taxes when the assets are eventually received by the beneficiary(ies).
How It Works
- Create trust agreement stating terms of the trust (usually for a term of years) and transfer cash or other property to trustee
- Trustee invests and manages trust assets and makes annual payments to the Lewis County Historical Society
- Remainder of trust transferred to your heirs upon the termination of the trust
- Annual gift to the Lewis County Historical Society
- Future gift to heirs at fraction of property’s value for transfer tax purposes
- Professional management of assets during term of the trust
No charitable income-tax deduction, but you, as the donor, are not taxed on the annual income of the trust