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Planned Giving

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Case Study

The following is an illustration of how this type of donation works.

George is 55 years old and married with three children. He has a portfolio worth $800,000 and wants to support a qualified charitable organization today. Following his advisor's recommendation, George creates a 15-year charitable lead annuity trust with his portfolio.


How the Trust Is Set Up
Because George wanted to witness the results of his generosity, he arranged the trust so that it provided payments to the organization during his lifetime instead of through his estate. George's trust pays $56,000 (7 percent of the initial fair market value) to the organization each year for 15 years, which will total $840,000. After that, the balance in the trust goes to his children.

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Contact Susan Shattuck at 480-941-3507 or sshattuck@dbg.org to learn more about this tax-savvy way to support Desert Botanical Garden.

Major Tax Benefits
His gift tax deduction is $698,4881 against the $800,000 of assets. Therefore only the difference ($101,512) is subject to gift tax, which is offset against his $5.34 million lifetime gift tax exclusion in 2014. 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.

Additional Advantages
George's children will receive a sizable inheritance, albeit not for 15 years. And after 15 years in the trust, the portfolio should be worth close to $800,000 if the underlying trust assets experience just average market performance (in this case, 7 percent growth). This will save the family unnecessary estate taxes by moving $800,000 from his estate. It also will still provide for George's philanthropic interests in a very tax-efficient manner.



1Assuming annual payments and a 2.4 percent charitable midterm federal rate—deductions vary based on income earned.








Copyright © The Stelter Company, All rights reserved.

The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.


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