Example: Charitable Lead Trust
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Dr. Alexandra Bowman wishes to transfer $1,000,000 to her son and to give Oberlin a fixed income of $40,000 each year for seven years in order to refurbish a specialized research laboratory. A charitable lead annuity trust can achieve these goals. If Dr. Bowman is the “owner” of the trust for income tax purposes, at the time she creates the trust she will be eligible for a charitable deduction of approximately $796,000, the present value of Oberlin’s income stream. Each year she will include the income from the trust in her income. If Dr. Bowman is not the “owner” of the trust, she will receive no charitable deduction, but she will exclude the trust’s income from her tax base. This result is roughly the same as making annual deductible contributions of $80,000.

Taking the next step:

To learn more about charitable lead trusts, please contact the Gift Planning staff at gift.planning@oberlin.edu or 440-775-8599. We also encourage you to fill out the request for more information form so we may better assist you.

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