A grantor lead trust provides a donor with a charitable income-tax deduction for the present value of the payments HUC-JIR is to receive from the trust for a specified period of time. The donor, however, continues to be taxed on the income earned by the trust each year—including the amount distributed to HUC-JIR. (To avoid this negative tax result, donors often fund grantor lead trusts with tax-exempt securities.) At the end of the trust term, the assets are returned to the donor.
