You can benefit from the tax savings that result from supporting the Jacobson Jewish Community Foundation without giving up the assets that you'd like your family to receive someday with a donation in the form of a charitable lead trust.
There are two ways that charitable lead trusts make payments to the JJCF:
A charitable lead annuity trust pays a fixed amount each year to the JJCF 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 the JJCF go up as well.See How It Works
George would like to support the JJCF 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 the JJCF 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 $854,311. 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 3.2 percent charitable midterm federal rate.
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Legal Name: Jacobson Jewish Community Foundation of the Jewish Federation of South Palm Beach County
Address: 9901 Donna Klein Boulevard, Boca Raton, Florida 33428
Federal Tax ID Number: 59-1945109