Charitable lead trust

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charitable (adjective, char-i-ta-ble, \ ˈtʃærətəbəl \) lead (noun, lead, \ liːd \) trust (noun, trust, \ trʌst \)

Definition: is a trust type that serves the purpose of reducing the taxable income of the beneficiaries by firstly granting a share of the trust’s funds to various charity organizations, and later, once a predetermined period of time has passed, transferring the rest to the appropriate beneficiaries. This mechanism is oftentimes used to decrease taxes that fall onto an estate left by a deceased individual until it can be handed over to the beneficiaries that will need to pay lower taxes.

In a Sentence:

  1. I think establishing a charitable lead trust is a great idea. First, we’ll spend some money on community causes and give back to the society, and afterward, we’ll be able to pay much lower taxes.
  2. We’ve contacted an agency to find out how we can create our own charitable lead trust. It turns out, the process of establishing such a trust won’t be as straightforward as we thought it to be.

Synonyms and related words: charitable remainder trust, trust, trust company, charitable organization