Charitable Lead Trusts

Provide for Cornell College and Your Loved Ones

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Charitable lead trusts are gift vehicles that allow donors to support Cornell College during their lifetime, pass their assets to their loved ones, and realize potential gift and estate tax savings through their gift.

There are two ways charitable lead trusts make payments:

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

Here is a Potential Scenario

Man smilingGeorge would like to support Cornell College and provide for his children. Following his advisor's recommendation, George funds a charitable lead annuity trust with assets valued at $800,000. George's trust pays $56,000 (7 percent of the initial fair market value) to Cornell College each year for 15 years, which will total $840,000. After that, the balance in the trust goes to his children. His gift tax deduction is $698,488* against the $800,000 of assets. Therefore only the difference ($101,512) 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 $800,000 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 the Office of Alumni & College Advancement at 319.895.4315 | 877.683.7666 or giving@cornellcollege.edu to talk about supporting Cornell College by setting up a charitable lead trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Cornell College in your plans, please use our legal name and federal tax ID.

Legal Name: Cornell College
Address: 600 First Street SW, Mount Vernon, IA 52314
Federal Tax ID Number: 42-0680335

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

View My Complimentary Brochure