The Missouri League for Nursing (MLN) Board of Directors is pleased to announce this program to assist you in making decisions regarding donations to charity. The MLN is a 50lc(3) organization and qualifies as a "public" charity by the IRS. Your contributions will assist MLN in meeting its mission to support the delivery of quality health care by nurses and other health care providers through education, collaboration, and information.

CHARITABLE LEAD TRUSTS

A charitable lead trust is essentially the reverse of a remainder trust. An income payout is provided to the charity for a specified term while you transfer the remainder interest to your heirs. The value of the remainder interests is reduced for gift or estate tax purposes by the value of the charity's income interest.

A lead trust can be appropriate when you and your family have little need for the current income an asset is generating but wish to transfer the asset to heirs with reduced tax consequences. Lead trusts can be established during an individual's lifetime or can be created at death to reduce the taxable estate. There are no minimum payout requirements with a lead trust and no specific limitations on the trust's term.

A lead trust can be established with one of two types of payout and with or without an income tax deduction for the donor at the time the trust is funded.

In a charitable lead annuity trust, the charity's income interest is in the form of an annuity or a fixed payout.

In a charitable lead unitrust, the income interest is determined based on a fixed percentage of the value of trust assets, valued annually.

Unlike a charitable remainder trust, not all lead trusts entitle you to an income tax deduction at the time the trust is established.

A grantor lead trust entitles a donor to a one-time charitable income tax deduction equal
to the present value of the income stream to be paid to the charity. In subsequent years,
any income earned in the trust will be taxable to the donor with no charitable deduction.

A nongrantor lead trust does not entitle the donor to an income tax deduction. Any income
earned each year is taxable to the trust, which is then titled to offset the income by the
distributions made to the charity.

This information is being provided as a service and should not be construed as legal, tax, or financial advice. Please consult your tax consultant and your attorney for legal advice regarding your specific situation and for the preparation of any legal documents.

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