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Provide for your loved ones and
Walla Walla University

Charitable lead trusts

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Do you want to benefit from the tax savings that result from supporting Walla Walla University, yet don’t want to give up any assets that you would like your family to receive someday? You can have it both ways with a charitable lead trust.

There are two ways charitable lead trusts make payments:

  1. A charitable lead annuity trust pays a fixed amount each year to Walla Walla University and is more attractive when interest rates are low.
  2. 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 assets go up in value, for example, the payments to Walla Walla University go up as well.

Check out this potential scenario

Man smiling George would like to support Walla Walla University and provide for his children. Following his advisor’s recommendation, George funds a charitable lead annuity trust with assets valued at $2,500,000.

George’s trust pays $175,000 (7 percent of the initial fair market value) to Walla Walla University each year for 15 years, which will total $2,625,000. After that, the balance in the trust goes to his children. Assuming a 6 percent investment return, the children will receive approximately $1,918,101.

His gift tax deduction is $2,182,775* against the $2,500,000 of assets. Therefore, only the difference ($317,225) is subject to gift tax, which is offset against his lifetime gift tax exclusion. 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. Had George given the $2,500,000 outright to his children, it would have been a taxable gift.

*Assuming annual payments and a 2.4 percent charitable midterm federal rate.

Learn how to fund it

You can use the following assets to fund a charitable lead trust:

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Next steps

  1. Contact Dorita Tessier, CFRE, CSPG at (509) 527-2646 or dorita.tessier@wallawalla.edu to talk about supporting Walla Walla University by setting up a charitable lead trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Walla Walla University in your plans, please use the legal name and federal tax ID.

Legal name: Walla Walla University
Address: 204 South College Avenue, College Place, WA 99324
Federal tax ID number: 91-0617727

Discover which type of charitable trust best fits your estate plan with the FREE guide, Trusts: Choose From 2 Win-Win Ways to Donate.

View the Free Brochure

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