Charitable Lead Trust

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With a charitable lead trust, you can benefit from the tax savings that result from supporting Step Up For Students without giving up the assets you'd like your family to receive someday.

There are two ways that charitable lead trusts make payments to Step Up:

A charitable lead annuity trust pays a fixed amount each year to Step Up 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 Step Up go up as well.

*A charitable lead trust may have gift and estate tax benefits. Step Up For Students does not offer charitable lead trusts. Please seek the advice of your financial or legal advisor to learn about the costs and benefits of charitable lead trusts and if it is right for you.

An Example of How It Works

Man smilingA father would like to support a nonprofit like Step Up and provide for his children. He received a windfall amount of income and needs a large income tax deduction to offset the income. Following his advisor's recommendation, he funds a grantor charitable lead annuity trust with assets valued at $1,000,000. His trust pays $70,000 (7 percent of the initial fair market value) to Step Up each year for 15 years, which will total $1,050,000. After that, the balance in the trust reverts back to him. He receives an income tax charitable deduction of $854,311. Assuming the trust earns an average 6 percent annual rate of return, he receives approximately $767,240 at the end of the trust term.

*Assuming annual payments and a 3.2 percent charitable midterm federal rate.

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Next Steps

  1. Contact Elizabeth L. Watson at (407) 491-7429 or ewatson@stepupforstudents.org to talk about supporting Step Up by setting up a charitable lead trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Step Up in your plans, please use our legal name and federal tax ID (59-3649371).

Legal Name: Step Up For Students
Address: 4655 Salisbury Road, Suite 400, Jacksonville, FL 32256
Federal Tax ID Number: 59-3649371