Charitable Lead Trust
Protect Your Assets and Help People Facing Hunger
Do you want to benefit from the tax savings that result from supporting Feeding America without giving up the assets that you'd like your family to receive someday? You can have it both ways with a charitable lead trust.
This gift allows you to make a significant gift to Feeding America and transfer assets to one or more beneficiaries. Income payments from the trust would go to Feeding America for a specific number of years. After the term of the trust, the remaining assets go to your beneficiaries.
There are two ways that charitable lead trusts make payments to Feeding America:
A charitable lead annuity trust pays a fixed amount each year to Feeding America 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 Feeding America go up as well.
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An Example of How It Works
George has two boys and can't imagine them going to bed hungry. He would like to support Feeding America and provide for his children. 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 $70,000 (7% of the initial fair market value) to Feeding America each year for 15 years, which will total $1,050,000. After that, the balance in the trust reverts back to George. He receives an income tax charitable deduction of $955,700. Assuming the trust earns an average 6% annual rate of return, George receives approximately $767,240 at the end of the trust term. George not only benefits financially, he gets the satisfaction of knowing he's made a difference to children like his who struggle to get enough to eat.
*Based on a 1.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
- Contact Jessica Noe at 800-771-2303, Ext. 5593 or email@example.com to talk about supporting Feeding America by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include Feeding America in your plans, please use our legal name and federal tax ID.
Legal Name: Feeding America
Address: 161 N. Clark Street, Suite 700, Chicago, IL 60601
Federal Tax ID Number: 36-3673599
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Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.