Mrs. B., who has an estate valued at $2,200,000 irrevocably transferred $200,000 in cash to a lead unitrust that pays 5 percent of its value each year to Carroll University for 20 years. Mrs. B., had a cost basis of 50 percent of her gift and is in the 38.6% tax bracket. She qualifies for a charitable deduction of approximately $126,278. The trust will provide the college $10,000 the first year and a variable amount there after each year, with a total benefit of $367,850 over twenty years. The beneficiary of the trust, in this case, her children and grand children, will receive the trust's assets when the trust terminates. Any asset growth that occurs within the trust will be distributed to Mrs. B's family free of gift or estate taxes. In this case, her family would receive approximately $604,704. If Mrs. B. would have transferred the appreciated property directly to her family, without the use of a lead trust, she would have paid approximately $1,038,854 in total taxes, no benefit would have been provided to Carroll and her family would have only received $566,790.

Features and Benefits

• Immediate
  Gift tax deduction of $125,054. Remove trust principal from your estate.
• Annual
  First year payment to Carroll University of $10,000. Payments will vary in future. Projected total payments to Carroll University of $367,856 over 20 years.
• Future
  Projected net to family of $604,704 from trust. Reduced estate taxes and costs. Trust growth transferred to family tax-free.

Contact Marc R. Barbeau, senior advancement officer for gift planning and estate services, Carroll University, 100 N. East Ave., Waukesha, WI 53186, 262.524.7241 or mbarbeau@carrollu.edu.

The information on this web site is not intended as legal advice. For advice and assistance in specific situations, the services of a professional advisor should be obtained.