In establishing a Charitable Lead Trust, a donor irrevocably transfers cash or property to a trust and creates two interests - an income interest that is paid annually to the Jewish Community Foundation for the life of the donor or for a term of years, and a remainder interest that is paid to the donor or to others on the termination of the trust.

The charitable income payments may be a fixed amount (annuity trust) or a fixed percentage of the trust assets revalued annually (unitrust). When the trust term ends, the remaining principal is returned to the donor or transferred to the individuals named by the donor, typically children or grandchildren.

The Charitable Lead Trust is most often used to make a substantial charitable gift over a period of time, while passing on assets to children or grandchildren on the termination of the trust. In planning a charitable lead trust, it is important to keep in mind that assets passed on to grandchildren may be subject to the generation skipping transfer tax.

Advantages of a Charitable Lead Trust:

• You can make a large contribution to the Jewish Community Foundation over the trust term
  
• Annual payments to the Foundation can be used to create and build a named endowment fund
  
• The amount paid to the Jewish Community Foundation may be used to establish an advisory fund from which distributions to special charitable organizations can be made
  
• You may be able to pass significant wealth to another generation with a minimum of gift and estate taxes
  
• If you want to retain the use of the assets during your lifetime, the charitable lead trust can be funded through your will or living trust.