Charitable Lead Trusts Offer You Options
You can benefit from the tax savings that result from supporting William Penn University 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 William Penn University:
A charitable lead annuity trust pays a fixed amount each year to William Penn University 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 William Penn University go up as well.
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An Example of How It Works
George would like to support William Penn University 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 William Penn University 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.
- Contact Marsha Riordan at 641-673-1045 or email to talk about supporting William Penn University by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include William Penn University in your plans, please use our legal name and federal tax ID.
Legal Name: William Penn University
Address: Oskaloosa, IA
Federal Tax ID Number: 42-0707120