An instrument (trust) known as a charitable lead trust makes it possible for you to make ia gift of income from the trust assets to the AAHF for a period of time. After the designated period of time has lapsed, the trust corpus is returned to you or your family.
Grantor Lead Trust
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A grantor trust pays income to the AAHF for a term of years and at the end of the term, returns the principal to the grantor (donor). This type of lead trust provides a significant current charitable income tax deduction. However, since the income to charity is taxed as income to the donor, it is frequently funded with tax exempt securities or cash.
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Grantor Family Lead Trust
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This trust also pays income to the AAHF for a period of time; but principal is returned to family members other than the donor. The grantor family lead trust provides an excellent way to pass appreciating assets to family in the future with rewarding gift tax benefits.
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Testamentary Lead Trust
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This trust is established by The Last Will and Testament, and does not become effective until the death of the grantor. Income is provided to the AAHF for a period of years following the death of the grantor. The trust corpus is reserved for heirs in the future. The testamentary lead trust can lower the federal estate tax of the decedent.
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