Charitable lead trust

Protect your assets

A charitable lead trust will give you tax savings this year, provide years of support for Environmental Defense Fund, and also grow your assets for your family to receive someday.

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

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


An example of how it works

Father smiling with childrenGeorge would like to support EDF 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 EDF 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.

Discover more

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Next steps

  1. Contact Cynthia Eubank DiLeo at 877-677-7397 or legacy@edf.org to talk about supporting EDF by setting up a charitable lead trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include EDF in your plans, please use our legal name and federal tax ID.

Legal Name: Environmental Defense Fund, Inc.
Address: 257 Park Avenue South, New York, NY 10010
Federal Tax ID Number: 11-6107128

 

  1. Share with us that you have included EDF in your plans in order to join the Osprey Society today.