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Bryn Mawr Legacy: A Gift for Learning, A Gift for the Future


Charitable Lead Trust

A charitable lead unitrust is a gift plan that allows you to transfer assets to family members at reduced tax cost while making a generous gift to Bryn Mawr College. The main goals of a lead trust are to preserve assets, to enable a donor to make a current gift to a charity, and significantly reduce future taxes on the donor’s estate.

As a lead unitrust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, State Street Global Advisors on behalf of Bryn Mawr College or a bank trust department). During the lead unitrust's term, the trustee invests the unitrust's assets. Each year, the trustee pays a fixed percentage of the unitrust's current value, as revalued annually, to Bryn Mawr College, or a combination of charitable recipients. If the unitrust's value goes up from one year to the next, its payout to Bryn Mawr College (and any other charitable recipients) increases proportionately. Likewise, if the unitrust's value goes down, the amount it pays out also goes down.

The lead unitrust'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. Payments are made out of trust income, or trust principal if the trust income is not adequate. If trust income exceeds the charitable payment in a given year, the trust pays income tax on the excess.

When the lead unitrust term ends, the unitrust distributes all of its accumulated assets to you, family members, or other beneficiaries named by you. If the assets are to be returned to you, you receive an income tax deduction when the trust is created. If the assets are passed on to family members or other beneficiaries, estate or gift taxes on the value of the gift are significantly reduced or completely eliminated. You may add funds to your unitrust whenever you like.



BENEFITS INCLUDE:

  • You will qualify for a federal gift tax deduction.
  • Bryn Mawr College (and any other charitable recipients) will receive annual payments from your trust for a term of years, or for another term you designate.
  • 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
  • You will provide generous support of Bryn Mawr College