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1501 Mendocino Ave.
Santa Rosa, CA 95401-4395
Charitable Lead Trust
A charitable lead trust is an arrangement whereby income generating assets may be placed in trust to the SRJC Foundation for a designated period of years, after which period the assets transfer to non-charitable beneficiaries named by the donor. The trust is called a “lead” trust because the income interest paid to the Foundation “leads” or precedes the “remainder” interest paid to the beneficiaries.
Types of lead trusts:
- Grantor Lead Trust – This is a gift arrangement in which the donor (grantor) transfers income producing assets to a trust, income is paid to a charitable institution (SRJC Foundation) over the trust term, and at the end of the term the trust principal returns to the donor. In this case, the donor receives an income tax deduction based on the present value of the gift. He/she also pays income tax on the trust income each year.
- Non-Grantor Lead Trust – In this situation, the donor chooses another non-charitable beneficiary (other than him/herself) to receive the assets at the end of the trust term. The donor does not receive an income tax deduction; however, he/she is not liable for income tax on the annual income of the trust. This type of trust is a taxable entity. The donor receives a gift and estate tax deduction for the present value of the gift of future income.
Minimum Funding Level:
The minimum amount suggested to establish a charitable lead trust is $100,000 and trust terms are not to exceed 20 years unless approved by the Foundation's Board of Directors.
Minimum Age Levels:
Rate of Payment:
The annual payments of a charitable lead trust must be in one of the following forms:
- As a unitrust payment, which is a stated percentage of the fair market value of the assets of the trust, determined at least annually.
- Or, as an annuity payment, which is a fixed dollar amount.
Unlike other gift vehicles, there is no required minimum percentage payout.
Any money or personal property may be used to fund a lead trust. Real property will not be used except in special circumstances approved by the Board of Directors. However, income must be produced by that property or its proceeds.
Charitable Gift Annuity
Charitable Remainder Unitrust with SRJC Foundation as Trustee
Charitable Remainder Annuity Trust with SRJC Foundation as Trustee
Charitable Lead Trust
Retained Life Estate
Gifts of Retirement Plan Interests