What is it?
A charitable lead trust is a trust with both charitable and noncharitable beneficiaries. It is called a lead trust because the charity is entitled to the lead (or first) interest in the trust asset, and the noncharitable beneficiary receives the remainder (or second-in-line) interest. The operation of a charitable lead trust is almost the opposite of a charitable remainder trust. Every year during the trust’s term, the charity receives payment from the trust’s assets. At the end of the trust’s term, the remaining assets pass to the noncharitable beneficiaries, who are often children.