Everything you always wanted to know about charitable lead trusts but were afraid to ask.

By Kathleen Stephenson and Lisa B. Petkun

In the same vein, most charitable lead trusts are non-grantor trusts. Here the settlor doesn’t claim a charitable-income tax deduction for the transfer to the trust and is not taxed on the trust income during its term.

A charitable lead trust reduces the value of the amount ultimately passing to the non-charitable remainder beneficiary by producing a charitable-gift or estate-tax deduction on the transfer.