Charitable Lead Trust
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You can benefit from the tax savings that result from supporting the American Association of Orthodontists 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 AAO Foundation:
A charitable lead annuity trust pays a fixed amount each year to the AAO Foundation 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 AAO Foundation go up as well.
An Example of How It Works
George would like to support the AAO Foundation 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% of the initial fair market value) to the AAO Foundation 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 $955,700. Assuming the trust earns an average 6% annual rate of return, George receives approximately $767,240 at the end of the trust term.
*Based on a 1.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
- Contact Jackie C. Bode, MA, CFRE at 314.292.6546, 800.424.2841 x546 or email@example.com to talk about supporting the AAO Foundation by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include the AAO Foundation in your plans, please use our legal name and federal tax ID.
Legal Name: American Association of Orthodontists Foundation
Address: 401 N. Lindbergh Blvd., St. Louis, MO 63141
Federal Tax ID Number: 43-6056320