Charitable Lead Trust
Protect Your Assets
You can benefit from the tax savings that result from supporting the University of Connecticut Foundation 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 the UConn Foundation:
A charitable lead annuity trust pays a fixed amount each year to the UConn Foundation 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 the UConn Foundation go up as well.
An Example of How It Works
George would like to support the UConn Foundation 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 percent of the initial fair market value) to the UConn Foundation 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 $873,110. Assuming the trust earns an average 6 percent annual rate of return, George receives approximately $767,240 at the end of the trust term.
George's trust pays $175,000 (7 percent of the initial fair market value) to the UConn Foundation each year for 15 years, which will total $2,625,000. After that, the balance in the trust goes to his children. Assuming a 6 percent investment return, the children will receive approximately $1,918,101.
*Assuming annual payments and a 2.4 percent charitable midterm federal rate.
- Contact Gregory Knott at (860) 486-6135 or email@example.com to talk about supporting the UConn Foundation by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include the UConn Foundation in your plans, please use our legal name and federal tax ID.
Legal Name: The University of Connecticut Foundation, Inc.
Address: 2390 Alumni Drive, Suite 3206, Storrs, CT 06269-3206
Federal Tax ID Number: 06-6070722
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Gifts That Pay
Your payments depend on your age at the time of the donation. If you are younger than 60, we recommend that you learn more about your options and download this FREE guide Plan for Retirement With a Deferred Gift Annuity.View My Guide
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.