What It Is:

A non-grantor charitable lead annuity trust is a gift plan defined by federal tax law that allows you to transfer assets to family members at reduced tax cost while making a generous gift to Wilson College.

As a lead annuity trust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, Wilson College or a bank trust department).

During the lead annuity trust's term, the trustee invests the trust's assets and provides a fixed dollar amount each year to Wilson College. These payments are used for the charitable purpose you designate and continue until the trust term ends or until the highly unlikely event that the trust distributes all its assets.  The trust's term may be for a specific number of years (10-20 years is common), one or more lifetimes, or a combination of the two. The payments are made out of trust income, or trust principal if the trust income is not adequate. If trust income during a given year exceeds the annual charitable payment, the trust pays income tax on the excess.

When the lead annuity trust term ends, the trust distributes all of its accumulated assets to family members or other beneficiaries named by you.

Benefits:

  1. You will qualify for a federal gift tax deduction.
  2. Wilson College will receive fixed annual payments from your trust for a term of years, or for another term you designate.
  3. The beneficiaries of your trust (for example, family members) will receive all of the trust's assets when the trust terminates. Any asset growth that occurs within the trust will be distributed to your trust's beneficiaries free of gift or estate tax.
  4. Your gift will benefit from expert asset management, provided by the same professionals who manage Wilson College's endowment.