Charitable Lead Trust

Protect Your Assets

If you want to make an impact now at Philabundance 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 Philabundance 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 Philabundance:

A charitable lead annuity trust pays a fixed amount each year to Philabundance and is more attractive when interest rates are low.

A charitable lead unitrust pays a variable amount each year to Philabundance 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 Philabundance go up as well.

An Example of How It Works

Father smiling with children George would like to support Philabundance 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 Philabundance 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 $614,445. Assuming the trust earns an average 8% annual rate of return, George receives approximately $1,600,286 at the end of the trust term.

*Based on a 5.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.

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Next Steps

Contact Scott Fremont at 724-237-5813 or sfremont@philabundance.org to talk about supporting Philabundance by setting up a charitable lead trust.
Seek the advice of your financial or legal advisor.
If you include Philabundance in your plans, please use our legal name and federal tax ID.

Legal name: Philabundance
Address: 3616 S Galloway Street, Philadelphia PA 19148
Federal tax ID number: 23-2290505

Discover More

See which type of charitable trust best fits your estate plan with the FREE guide Trusts: Choose From Two Ways to Donate.