View your FREE brochure on trusts.
Download your FREE Estate Planning Kit
Do you want to benefit from the tax savings that result from supporting Easterseals, 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 Easterseals 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 Easterseals go up as well.
Check Out This Potential Scenario
George would like to help Easterseals champion the abilities of children and adults and provide for his children. Following his advisor's recommendation, George funds a charitable lead annuity trust with assets valued at $800,000. George's trust pays $56,000 (7 percent of the initial fair market value) to Easterseals each year for 15 years, which will total $840,000. After that, the balance in the trust goes to his children. His gift tax deduction is $701,528* against the $800,000 of assets. Therefore only the difference ($98,472) is subject to gift tax, which is offset against his lifetime gift tax exclusion. After that, the remaining trust assets and all of their growth will pass to his family at zero additional cost in gift and estate taxes. Had George given the $800,000 outright to his children, it would have been a taxable gift.
*Assuming annual payments and a 2.0 percent charitable midterm federal rate.