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Protect Your Assets
You can benefit from the tax savings that result from supporting Penn State 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 Penn State:
A charitable lead annuity trust pays a fixed amount each year to Penn State 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 Penn State go up as well.
Learn more by viewing our Charitable Lead Trust fact sheet.
An Example of How It Works
George would like to support Penn State 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 Penn State 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 $1,000,000. Assuming the trust earns an average 6% annual rate of return, George receives approximately $977,637 at the end of the trust term.
*Based on a .04% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Calculate Your Benefits
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