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If you want to make an impact now at the Sisters of Providence 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 the Sisters of Providence 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 the Sisters of Providence:
A charitable lead annuity trust pays a fixed amount each year to the Sisters of Providence and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year to the Sisters of Providence 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 Sisters of Providence go up as well.
Georgia would like to support the Sisters of Providence and receive tax benefits. Georgia received a windfall amount of income and needs a large income tax deduction to offset the income. Following her advisor’s recommendation, Georgia funds a grantor charitable lead annuity trust with assets valued at $1,000,000. Georgia’s trust pays $60,000 (6% of the initial fair market value) to the Sisters of Providence each year for 15 years, which will total $900,000. After that, the balance in the trust reverts back to Georgia. He receives an income tax charitable deduction of $639,970. Assuming the trust earns an average 8% annual rate of return, Georgia receives approximately $1,534,987 at the end of the trust term.
*Based on a 4.6% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Submit a few details and see how a charitable lead trust can benefit you.
Legal name: Sisters of Providence of Saint Mary's-of-the-Woods, Indiana
Address: 1 Sisters of Providence, Saint-Mary-of-the-Woods, IN 47876
Federal tax ID number: 35-0868174
See which type of charitable trust best fits your estate plan with the FREE guide Trusts: Choose From Two Ways to Donate.