A college receives cash from a donor under a trust agreement that requires the college to invest the assets and receive a specified dollar amount of earnings. Upon the death of the donor the assets revert to the donor's estate. This is an example of a charitable lead trust split-interest agreement.

Question

Quizplus · Accepted Answer

There are two types of split-interest agreements; a lead trust or a remainder trust. A lead trust is one in which the charity receives income during the life of the trust. When the donor dies and the trust terminates, the resources of the trust go to the heirs. A remainder trust is one in which a beneficiary receives income during the life of the trust and the college receives the resources upon termination of the trust.

A College Receives Cash from a Donor Under a Trust