Charitable lead trusts

In general, a trust is a legal entity created by a donor in order to manage assets transferred to it by the donor. A charitable lead trust is a particular kind of trust. Each year during its existence, it makes payments to Medical Teams International. When the trust ends, its remaining assets are distributed to one or more individuals (possibly including the donor who set the trust up).

Normally, a charitable lead trust does not result in an income tax deduction for the donor. Rather, such trusts are usually established by people who want some of their wealth to pass to their heirs eventually, but who are trying to reduce or eliminate the gift tax or estate tax that would be due if such wealth were simply transferred directly to those heirs.

Because Medical Teams International benefits from the trust before any heirs do, the value of what the heirs will ultimately receive is deemed to be reduced.

A charitable lead trust is a relatively sophisticated and rarely used charitable giving vehicle. In the right circumstances, it can provide tremendous support for Medical Teams International, in addition to saving taxes for the donor or the donor’s estate.

Read an example of a charitable lead trust.

If you would like additional information, please contact us.

Linda Ranz
lranz@medicalteams.org
425.284.1941