Charitable Lead Trusts
Do you want to benefit from the tax savings that result from supporting Cal Poly, 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.
How It Works
You give assets to a trust that pays Cal Poly an income for a number of years, which you choose. The longer the length of time, the better the gift tax savings for you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members down the line (typically children and grandchildren) at a minimal cost.
There are two ways charitable lead trusts make payments:
A charitable lead annuity trust pays a fixed amount each year to Cal Poly 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 Cal Poly go up as well.
Discover which type of charitable trust best fits your estate plan with the FREE guide Trusts: Choose From 2 Win-Win Ways to Donate.View My Free Brochure
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.
- Contact Cal Poly's Office of Gift Planning at 805-756-7125 or firstname.lastname@example.org to talk about supporting Cal Poly by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include Cal Poly in your plans, please use our legal name and Federal Tax ID.
Legal Name: California Polytechnic State University Foundation
Address: Heron Hall, Building 117, San Luis Obispo, CA 93407-0444
Federal Tax ID Number: #20-4927897
Check Out This Potential Scenario
George would like to support Cal Poly 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 Cal Poly 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.
*Assuming annual payments and a 2.4 percent charitable midterm federal rate.
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Calculate Your Benefits
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