If you want to make an impact for kids today 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 Boston Children's Hospital for a period of time. When the term is up, the remaining trust passes back to you, to your family, or other beneficiaries you select.
There are two ways that charitable lead trusts make payments to Boston Children's:
A charitable lead annuity trust pays a fixed amount each year to Boston Children's and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year to Boston Children's 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 Boston Children's go up as well.
See which type of charitable trust best fits your estate plan with the FREE guide Trusts: Choose From Two Ways to Donate.
- Contact the Office of Planned Giving at (857) 812-3197 or email@example.com to talk about supporting Boston Children's by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include Boston Children's in your plans, please contact us for our full legal name and tax ID number.
An Example of How It Works
George would like to help sick kids through Boston Children's 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 Boston Children's 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.
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