THE PLANNED GIFT CALCULATOR
(CAUTION: THERE ARE TWO TYPES OF THIS TRUST; PLEASE EXAMINE BOTH)
(1) WHAT IS A NON-GRANTOR CHARITABLE LEAD UNITRUST?
A non-grantor charitable lead unitrust is a gift plan defined by federal tax law that allows you to transfer assets to family members at reduced tax cost while making a generous gift to UW-L Foundation.
As a non-grantor lead unitrust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, UW-L Foundation or a bank trust department).
During the lead unitrust's term, the trustee invests the unitrust's assets. Each year, the trustee pays a fixed percentage of the unitrust's current value, as revalued annually, to UW-L Foundation. If the unitrust's value goes up from one year to the next, its payout to UW-L Foundation increases proportionately. Likewise, if the unitrust's value goes down, the amount it donates also goes down. These payments are used for the charitable purpose you designate.
The lead unitrust's term may be for a specific number of years (10-20 years is common), one or more lifetimes, or a combination of the two. Payments are made out of trust income, or trust principal if the trust income is not adequate. If trust income exceeds the charitable payment in a given year, the trust pays income tax on the excess.
When the lead unitrust term ends, the unitrust distributes all of its accumulated assets to family members or other beneficiaries named by you. You may add funds to your unitrust whenever you like.
BENEFITS INCLUDE:
- You will qualify for a federal gift tax deduction.
- UW-L Foundation will receive annual payments from your trust for a term of years, or for another term you designate.
- The beneficiaries of your trust (for example, family members) will receive all of the trust's assets when the trust terminates. Any asset growth that occurs within the trust will be distributed to your trust's beneficiaries free of gift or estate tax.
Your gift will benefit from expert asset management, provided by the same professionals who manage UW-L Foundation's endowment.
(2) WHAT IS A GRANTOR CHARITABLE LEAD UNITRUST?
A grantor charitable lead unitrust is a gift plan defined by federal tax law that allows you to retain ultimate possession of an asset while making a generous gift to UW-L Foundation.
As a grantor lead unitrust donor, you transfer assets, usually cash or securities, to a trustee of your choice (for example, UW-L Foundation or a bank trust department). During the lead unitrust's term, the trustee invests the unitrust's assets. Each year, the trustee pays a fixed percentage of the unitrust's current value, as revalued annually, to UW-L Foundation. If the unitrust's value goes up from one year to the next, its payout to UW-L Foundation increases proportionately. Likewise, if the unitrust's value goes down, the amount it donates also goes down. These payments are used for the charitable purpose you designate.
Although the grantor trust's term may be for one or more lifetimes, a specific number of years (10-20 years is common) is almost always used. Payments are made out of trust income, or trust principal if the trust income is not adequate.
When the grantor lead trust term ends, its charitable payments cease and the trust returns all of its accumulated assets back to you.
Because you retain ultimate possession of a grantor lead trust's assets, all taxable income earned by the trust during its term, including income distributed to UW-L Foundation, is taxable to you. For this reason, grantor lead trusts sometimes are invested to earn tax-free income. You may add funds to your unitrust whenever you like.
BENEFITS INCLUDE:
- You will qualify for a federal income tax deduction. Note that deductions for gifts of long-term appreciated property will be limited to 20% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 30% of your adjusted gross income. You may, if necessary, take unused deductions of either kind over the next five years, subject to the same 20% or 30% limitation.
- UW-L Foundation will receive annual payments from your trust for a term of years, or for another term you designate.
- You will receive all of the trust's assets when the trust terminates, including any appreciation that has occurred during the trust term.
- Your gift will benefit from expert asset management, provided by the same professionals who manage UW-L Foundation's endowment.
To perform calculations for the above option return to The Planned Gift Calculator and then click on "CALCULATIONS".
