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You can benefit from the tax savings that result from supporting The Jackson Laboratory 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 JAX:
A charitable lead annuity trust pays a fixed amount each year to JAX 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 JAX go up as well.
George would like to support JAX 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 JAX 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: The Jackson Laboratory
Address: 600 Main Street, Bar Harbor, ME 04609
Federal Tax ID Number: 01-0211513