Protect Your Assets
You can benefit from the tax savings that result from supporting The Conservancy of Southwest Florida 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 Conservancy:
A charitable lead annuity trust pays a fixed amount each year to the Conservancy 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 Conservancy go up as well.
An Example of How It Works
George would like to support the Conservancy and provide for his children. If he follows his advisor's recommendation, George would fund a charitable lead annuity trust with assets valued at $2,500,000.
George's trust would pay $175,000 (7 percent of the initial fair market value) to the Conservancy each year for 15 years, which would total $2,625,000. After that, the balance in the trust would go to his children. Assuming a 6 percent investment return, the children would receive approximately $1,918,101.
His gift tax deduction would be $2,317,400* against the $2,500,000 of assets. Therefore, only the difference ($182,600) would be subject to gift tax, which would be offset against his lifetime gift tax exclusion. After that, the remaining trust assets and all of their growth would pass to his family at zero additional cost in gift and estate taxes. If George would give the $2,500,000 outright to his children, it would be a taxable gift.
*Assuming annual payments and a 3.2 percent charitable midterm federal rate.
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- Contact Aaron Lapp at 239-403-4222 or AaronL@conservancy.org to talk about supporting the Conservancy by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include the Conservancy in your plans, please use our legal name and federal tax ID.
Legal Name: Conservancy of Southwest Florida
Location: 1495 Smith Preserve Way, Naples, Florida 34102
Federal Tax ID Number: 59-1157084