Charitable Lead Trust
Protect Your Assets
You can benefit from the tax savings that result from supporting the the Women's Foundation of Minnesota without giving up the assets that you'd like your family to receive someday with a donation in the form of a charitable lead trust.
There are two ways that charitable lead trusts make payments to the Women's Foundation:
A charitable lead annuity trust pays a fixed amount each year to the Women's Foundation and is more attractive when interest rates are low.
A charitable lead
An Example of How It Works
George would like to support the Women's Foundation (WFMN) 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 WFMN 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 $614,445. Assuming the trust earns an average 8% annual rate of return, George receives approximately $1,600,286 at the end of the trust term.
*Based on a 5.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
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The information in this publication is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in 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.