Creative Ways to Give

Non-Grantor Charitable Lead Annuity Trust

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

As a lead annuity trust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, John Brown University or a bank trust department). During the trust's term, usually a fixed number of years, the trustee invests the trust's assets. Each year, the trustee distributes a fixed dollar amount to John Brown University. These payments are used for the charitable purpose you designate and are made out of trust income, or trust principal if the trust income is not adequate. If trust income for a given year exceeds the annual charitable payment, the trust pays income tax on the excess.

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

Click here for a Charitable Lead Annuity Trust calculator.

Benefits Include:

1. You will qualify for a federal gift tax deduction.
2. John Brown University will receive payments each year. Payments in future years will vary with the value of the unitrust.
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 John Brown University's endowment.