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If you want to make an impact now at Trust for Public Land and also provide for your family later, consider setting up a charitable lead trust. You transfer cash or other assets to a trust that makes payments to Trust for Public Land for a period of time. When the term is up, the remaining trust passes to your family or other beneficiaries you select.
There are two ways that charitable lead trusts make payments to Trust for Public Land:
A charitable lead annuity trust pays a fixed amount each year to Trust for Public Land and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year to Trust for Public Land 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 Trust for Public Land 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.
George would like to support Trust for Public Land 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 Trust for Public Land 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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This comprehensive estate planning kit helps you protect your family and establish your legacy. FREE!
Download My KitThis comprehensive estate planning kit helps you protect your family and establish your legacy. FREE!
Download My KitInformation 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. California residents: 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. Oklahoma residents: 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. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.
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