may be the time to consider establishing a charitable lead
trust in support of the Kellogg School and Northwestern
University. This trust enables you to combine charitable
gifts to Kellogg or the university with the transfer of assets
to family members at reduced gift tax cost. As a lead trust
donor, you can irrevocably transfer assets, usually cash
or securities, to the trustee of your charitable lead trust.
of these features apply to all lead trusts, but a few are specific
to the nongrantor annuity lead trust).
1. The lead trust will make annual payments
to Kellogg/Northwestern for a predetermined number of years,
giving you the satisfaction
of supporting the university in a meaningful way.
2. The assets remaining in the trust at
plus any appreciation, will pass to your heirs with reduced
or no gift/estate tax cost.
3. When the trust is established, gift tax
may be due on the noncharitable element of the trust unless
credit is used. However, you will receive a gift tax deduction
for the charitable element of the trust. It is possible,
with the right combination of term and percentage payout
to Northwestern, to "zero-out” the gift tax.
4. The trust becomes a separate entity for
tax purposes. Any taxable income earned by the trust may
be offset by the
charitable deduction for the annual gifts to Northwestern.
5. Highly appreciated securities in the
trust may be used for the annual gifts to Northwestern,
allowing the trust
to bypass capital gains tax that would be due if the securities
6. When grandchildren are beneficiaries
of the trust, generation-skipping taxes may be substantially
7. Funding a lead trust with stock of a
family-owned business will freeze the value of the stock
for gift/estate tax purposes.
If you wish to learn more about establishing
a charitable lead trust at Kellogg, please contact Stephanie
in the Kellogg Development Office at 847-491-3348.