Lead Trust

With a lead trust the UNA Foundation receives income from the trust assets for a term of years. At the end of the term, the property returns to donor or, more commonly, to donor's children or grandchildren. Savings on gift tax, estate tax, and generation-skipping transfer taxes, and if set up during life, income tax savings.

Example: Donor owns municipal bonds worth $500,000 that he/she eventually wants to transfer to her children. She can establish a lead trust that pays a 7% annuity to the UNA Foundation for 20 years at $35,000 a year. Donor has made a gift to children the day the trust is established. Likely, no gift taxes will be paid since the gift will be sheltered by the donor's Unified Tax Credit. At the end of 20 years, the bonds will go to the children. Donor's charitable gift is $348,810 and donor will report a gift to children of $151,190 ($500,000 - $348,810).