Charitable Lead Trusts Offer You Options
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You can benefit from the tax savings that result from supporting Innovia Foundation 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 Innovia Foundation:
A charitable lead annuity trust pays a fixed amount each year to the Innovia Foundation 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 the Innovia Foundation go up as well.
An Example of How It Works
George would like to support Innovia Foundation 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% of the initial fair market value) to Innovia Foundation 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 $955,700. Assuming the trust earns an average 6% annual rate of return, George receives approximately $767,240 at the end of the trust term.
*Based on a 1.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
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- Contact PJ Watters at 509-624-2606 or email@example.com to talk about supporting Innovia Foundation by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include Innovia Foundation in your plans, please use our legal name and federal tax ID.
Legal Name: Innovia Foundation
Address: 421 West Riverside Avenue, Suite 606, Spokane, WA 99201-0405
Federal Tax ID Number: 91-0941053
Information 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. If you do not currently have a professional advisor, please contact our office for a list of current professional advisors. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. 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. 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. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.