Do you want to benefit from the tax savings that result from supporting GW, yet you don't want to give up any assets that you'd like your family to receive someday? You can have it both ways with a charitable lead trust.
There are two ways charitable lead trusts make payments:
A charitable lead annuity trust pays a fixed amount each year to GW and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year based on the value of the assets in the trust. With a unitrust, if the trust's assets go up in value, for example, the payments to GW go up as well.
See which type of charitable trust best fits your estate plan with the FREE guide Trusts: Choose From Two Ways to Donate.
How a Charitable Lead Trust Provides for Family and GW
George would like to support GW and receive tax benefits. George received a windfall amount of income and needs a large income tax deduction to offset the income. Following his advisor’s recommendation, George funds a grantor charitable lead annuity trust with assets valued at $1,000,000. George’s trust pays $60,000 (6% of the initial fair market value) to GW each year for 15 years, which will total $900,000. After that, the balance in the trust reverts back to George. He receives an income tax charitable deduction of $686,160. Assuming the trust earns an average 8% annual rate of return, George receives approximately $1,619,706 at the end of the trust term.
*Based on a 3.6% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
- Contact Adam Lewis at 202-994-7657 or email@example.com to talk about supporting GW by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include GW in your plans, please use our legal name and federal tax ID.
Legal name: the George Washington University
Address: 1922 F Street NW, Washington, DC 20052
Federal tax ID number: 53-0196584