Charitable Lead Trust

George would like to support MCF 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 MCF to support the endowment funds he chooses as the beneficiaries 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 $854,311 and, as a Montana taxpayer, also qualifies for the maximum Montana Endowment Tax Credit of $10,000. Assuming the trust earns an average 6% annual rate of return, George receives approximately $767,240 at the end of the trust term.