Charitable lead trusts offer a way for you to support the University of Kentucky Chandler Medical Center’s programs and transfer substantial assets to beneficiaries (children or grandchildren, for instance) with the potential for significantly lowered gift and estate taxes. You heirs may actually receive a larger inheritance than they would through an outright bequest or accumulation trust. Plus, the Medical Center receives an immediate flow of income.

With a charitable lead trust, you transfer property – such as real estate, securities, bonds, partnership interests, oil and gas properties, and the like – to a trust. The trustee may be either the UK Chandler Medical Center, a bank, yourself or any combination thereof. The trust pays an annual amount (a fixed amount or a percentage of the trust principal as revalued annually) to the Medical Center for a specified period. After this time, the property returns to you or a non-charitable beneficiary – usually a family member in the next or a succeeding generation. The property is generally appreciated and transferred with significantly reduced gift or estate taxes.

You may establish such a trust during your lifetime or under your Will. The manner in which the trust is established – that is, to whom the trust income is taxed – determines whether you receive an income tax deduction. In cases in which you do not receive an income tax deduction, however, you may realize other very important financial and estate planning goals.

For certain lead trusts – benefiting a specific non-profit institution such as the Medical Center – you may obtain an income tax deduction up to 30 percent of your adjusted gross income, with a five-year carry-over of any excess.

For more information about trusts, please contact a development officer or Dion Guest, gift planning officer, at (859) 257-7303.

Note: Please check with your financial advisor for details about which method of giving may best work for you.