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

By Kathleen Stephenson and Lisa B. Petkun

Charitable lead trusts may be subject to generation-skipping transfer tax depending on the identity of the non-charitable remainder interest. If the charitable lead trust is a CLAT, any allocation of generation-skipping transfer tax exemption will not be effective until the expiration of the charitable interest. As a result, the GST exemption should not be allocated to the trust until the interest in the non-charitable beneficiaries vest.