Charitable Lead Trusts
PROVIDE FOR YOUR LOVED ONES AND THEATRE UNDER THE STARS
Do you want to benefit from the tax savings that result from supporting Theatre Under the Stars, yet you don’t want to give up any assets that you’d like your family to receive someday? You can have it both ways with a charitable lead trust.
There are two ways charitable lead trusts make payments:
A charitable lead annuity trust pays a fixed amount each year to Theatre Under the Stars 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 Theatre Under the Stars go up as well.
CHECK OUT THIS POTENTIAL SCENARIO
Man smilingGeorge would like to support Theatre Under the Stars and provide for his children. Following his advisor’s recommendation, George funds a charitable lead annuity trust with assets valued at $800,000. George’s trust pays $56,000 (7 percent of the initial fair market value) to Theatre Under the Stars each year for 15 years, which will total $840,000. After that, the balance in the trust goes to his children. His gift tax deduction is $698,488 against the $800,000 of assets. Therefore only the difference ($101,512) is subject to gift tax, which is offset against his lifetime gift tax exclusion. After that, the remaining trust assets and all of their growth will pass to his family at zero additional cost in gift and estate taxes. Had George given the $800,000 outright to his children, it would have been a taxable gift.
Assuming annual payments and a 2.4 percent charitable midterm federal rate.
Contact Amy Lampi at 713.558.2647 or AmyL@tuts.com to talk about supporting Theatre Under the Stars by setting up a charitable lead trust.
Seek the advice of your financial or legal advisor.
If you include Theatre Under the Stars in your plans, please use our legal name and federal tax ID.
Legal Name: Theatre Under The Stars
Address: Houston, TX
Federal Tax ID Number: Please contact us for our federal tax ID number.
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.
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