Protect Your Assets

Charitable Lead Trusts Offer You Options

You can benefit from the tax savings that result from supporting Iowa State University 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 Iowa State:

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

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

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An Example of How It Works

Man smiling George would like to support Iowa State 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 Iowa State 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 $873,110. Assuming the trust earns an average 6 percent annual rate of return, George receives approximately $767,240 at the end of the trust term.

George's trust pays $175,000 (7 percent of the initial fair market value) to Iowa State 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.

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

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Next Steps

  1. Contact the office of gift planning at 800.621.8515 or giftplanning@foundation.iastate.edu to talk about supporting Iowa State by setting up a charitable lead trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Iowa State in your plans, please use our legal name and federal tax ID.

Legal Name: The Iowa State University Foundation
Address: Ames, Iowa
Federal Tax ID Number: 42-1143702