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If you want to make an impact now at the Monterey Bay Aquarium 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 Monterey Bay Aquarium 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 Aquarium:
A charitable lead annuity trust pays a fixed amount each year to the Aquarium and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year to the Aquarium 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 Aquarium go up as well.
George would like to support the Aquarium 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 the Aquarium 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 $770,960. Assuming the trust earns an average 8% annual rate of return, George receives approximately $1,637,530 at the end of the trust term.
*Based on a 2.0% 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: Monterey Bay Aquarium Foundation
Address: 886 Cannery Row, Monterey, CA 93940
Federal tax ID number: 94-2487469
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