Sounds intriguing, doesn't it? It's a trust, but one with an element of mystery and delay. The Wait a While trust is actually a charitable lead trust as described by Community Foundation Partners. The function of a charitable lead trust is to provide a charity with a stream of income for a period of time and then later, the family or other chosen beneficiaries receive the remainder interest - essentially everything that's left. It can be structured to eliminate or zero out any estate tax that might be due and provide a dual benefit - doing well (no tax), while doing good (helping the charity).
The "wait a while" concept is easy to understand and really does explain how the trust works. In a typical planning scenario, a charitable lead trust might be used as a fail-safe estate planning technique for a family whose assets are approaching the combined husband and wife maximum of $10,500,000. The estate plan could utilize a testamentary charitable lead trust to capture any assets over the maximum estate tax exemption amount. Then, at the death of the trust maker, the charitable lead trust would allow a favorite charity or charities to benefit while the family remainder beneficiaries enjoyed the first part of their inheritance equal to the exemption amount and then waited on the remainder. It's a win-win for everyone.
The length of time the lead portion of the trust would last depends on the payout necessary to eliminate the tax. It's a math problem. You can either set the term of years (the length of the time the charity receives the stream of income) or the payout (the percentage that will be paid out annually). The charitable calculator will do the rest.
Charitable lead trusts are not new, this is just a new twist - the Wait a While Trust. Consult with your tax or estate planning counsel for more information.
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