Charitable Lead Trusts
If you want to benefit from the tax savings that result from supporting St. Joseph's Indian School, but 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 St. Joseph's Indian School 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 St. Joseph's Indian School go up as well.
Discover which type of charitable trust best fits your estate plan with the FREE guide, Trusts: Choose From 2 Win-Win Ways to Donate.View My Free Brochure
An Example of How it Works
George would like to support St. Joseph's Indian School 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 percent of the initial fair market value) to St. Joseph's Indian School 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 $854,311. Assuming the trust earns an average 6 percent annual rate of return, George receives approximately $767,240 at the end of the trust term.
*Assuming annual payments and a 3.2% charitable midterm federal rate.
Delay Your Payments
If you are younger than 60 or don't need your payments immediately, you can set up a deferred gift annuity. This allows you to delay receiving payments until a later date — such as when you reach retirement. To learn more, view and download the FREE guide Plan for Retirement With a Deferred Gift Annuity.
Calculate Your Benefits
Submit a few details and see how a charitable lead trust can benefit you.
- Contact Denise Hyland at 1-800-584-9200 or firstname.lastname@example.org to talk about supporting St. Joseph's Indian School by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include St. Joseph's Indian School in your plans, please use our legal name and Federal Tax ID.
Legal name: St. Joseph's Indian School
Address: P.O. Box 100, Chamberlain, SD 57325-0100
Federal Tax ID: 46-0235912