Charitable Lead Trust: FAQs

Will I be able to claim an income tax deduction when I set up my charitable lead trust?

Maybe. If the trust is structured a certain way, you will be eligible to claim an income tax deduction in the year you set up your trust. However, that means that all of the trust income in following years will be taxed to you as well (subject to deductions for payments made to Johns Hopkins). Most donors structure their charitable lead trusts in a way that does not yield a current income tax deduction so that they do not have to worry about income tax issues in the future. In both cases, you are able to provide wonderful support to Johns Hopkins and pass trust appreciation to your family free of gift and estate taxes. We can provide you and your advisors with information that will help you decide which type of charitable lead trust will work better for you.

Can I name my grandchildren as beneficiaries of my charitable lead trust?

Yes, you may list your grandchildren as beneficiaries. Due to the generation-skipping tax, there are more complications related to a lead trust with grandchildren as beneficiaries than there are with one that passes assets directly to children. Most legal professionals would prefer the use of a charitable lead unitrust if grandchildren are named as beneficiaries.

How long will my charitable lead trust last?

There is no minimum or maximum term for your charitable lead trust. However, if you want to maximize the benefit to Johns Hopkins and minimize transfer taxes, we can help you determine the optimum term to accomplish your goals. Generally, the longer the term, the lower the taxable gift to your remainder beneficiaries and the higher the benefit to Johns Hopkins.