If you want to make an impact now at Saint Joseph Academy 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 Saint Joseph Academy 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 Saint Joseph Academy:
A charitable lead annuity trust pays a fixed amount each year to Saint Joseph Academy and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year to Saint Joseph Academy 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 Saint Joseph Academy go up as well.
An Example of How It Works
George would like to support Saint Joseph Academy and receive tax benefits. He received a windfall amount of income and needs a large income tax deduction to offset it. Following his advisor’s recommendation, George funds a grantor lead annuity trust with assets valued at $1,000,000. George’s trust pays $60,000 (6% of the initial fair market value) to Saint Joseph Academy 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 $686,160. Assuming the trust earns an average 8% annual rate of return, George receives approximately $1,619,706 at the end of the trust term.
*Based on a 3.6% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Calculate Your Benefits
Submit a few details and see how a charitable lead trust can benefit you.
- Contact Constance S. Sipple, CFRE at 216.671.0166 or email@example.com to talk about supporting Saint Joseph Academy by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include Saint Joseph Academy in your plans, please use our legal name and federal tax ID.
Legal name: St. Joseph Academy
Address: 3470 Rocky River Drive, Cleveland, OH 44111
Federal tax ID number: 34-1618516
See which type of charitable trust best fits your estate plan with the FREE guide Trusts: Choose From Two Ways to Donate.View My Guide
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