CHARITABLE LEAD TRUSTS

Charitable lead trusts are the reverse of the life-income gifts described previously. The income from the trust is first paid the Caltech Y as the charity’s interest leads the way (thus the name of the trust.)

Under this arrangement, donors transfer assets to a trustee who makes payments to the Y (and potentially other charities) for a pre-determined number of years, after which the assets are transferred to the donors’ heirs. The charitable lead trust allows donors to pass assets on to their children and grandchildren either completely free or free of all estate and gift taxes.