Leave a Legacy


Charitable Lead Unitrust

Make a substantial gift to The LeTourneau University Foundation in the form of annual payments and pass assets to your family or other heirs at reduced tax cost. 

The payment to The LeTourneau University Foundation is a percentage of the value of the trust each year.

charitable lead unitrust may be right for you if:

  • You have substantial assets not needed for your own financial security.
  • You want to provide for your family or other heirs.
  • You want to save gift taxes, estate taxes, and probate costs.
  • You want your gift to make a difference at LeTourneau University starting immediately.
  • You could consider a gift of $25,000 or more to benefit LeTourneau University and your heirs.
 

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Separate trust
A charitable lead unitrust is a separate taxable trust governed by an irrevocable trust agreement. You choose the trustee who is responsible for administering your lead trust and guiding the investment of its assets.

Irrevocable gift 
A charitable lead unitrust is an irrevocable arrangement. Once you transfer assets to create the trust, you cannot change your mind and get the assets back. This requirement assures that all of the payments promised in the trust agreement will go to support LeTourneau University.

Make payments to The LeTourneau University Foundation that may vary each year
Your lead unitrust makes payments to The LeTourneau University Foundation each year equal to a fixed percentage of its value, as revalued annually. If the value of your lead unitrust increases, its annual payments will increase. If the value of your lead unitrust decreases, its annual payments will also decrease. Your lead trust can make payments to more than one charity, if you wish.

You choose the payment rate
You choose the percentage of its value that your lead unitrust must distribute to The LeTourneau University Foundation each year. Lead unitrust donors typically select a payment amount that is likely to preserve a substantial remainder for family or other heirs. Payments are usually made in annual installments, but semiannual or quarterly installments are possible. 

Remaining assets to heirs
When your charitable lead unitrust ends, all remaining principal in the trust will be transferred to family members or other heirs you choose.

How long can my lead trust last?
While most lead unitrusts last for 10-20 years, other terms are possible. Your lead unitrust can last for one or more lives, for a specific length of time, or for a combination of lives and years. The term length you choose will depend on when you want your heirs to receive their trust distribution, as well as other factors.

Tax benefits

  • Reduce or eliminate gift tax on initial gift if your gift exceeds the then applicable gift tax credit.
  • Avoid all gift and estate tax on asset growth.

When you transfer assets to your lead unitrust, you make a taxable gift to the individuals who will receive your trusts principal when it ends. However, your gift of payments to The LeTourneau University Foundation earns you a charitable deduction in the year of your gift that will reduce your taxable gift. In addition, the assets in your lead unitrust are removed from your taxable estate. This means that any growth in the value of your trusts assets during its term can be passed on to your heirs completely free of gift and estate taxes.

Taxation of the trust
A lead unitrust is a taxable trust. However, a lead trust pays income tax only if its income exceeds the amount it pays to The LeTourneau University Foundation during the year. A careful trustee can balance your lead unitrusts income against its charitable payments in order to minimize its income taxes.

Lead unitrusts for grandchildren
Lead trusts for the benefit of grandchildren present special tax planning challenges related to a tax called the generation skipping tax. Many donors choose to create a charitable lead unitrust in this situation, in particular, as it is easier to plan for generation skipping tax issues when creating a lead unitrust than when creating a lead annuity trust. Please be sure to talk to your advisors or us about these tax considerations.

Suitable funding assets
You can fund your lead unitrust with many different kinds of assets. All of the following assets can work well:

  • cash
  • securities
  • a closely-held business
  • commercial property
  • a combination of these assets

Assets that you expect to increase substantially in value over time can be especially attractive candidates for transfer into a lead trust. 

Unlike with many other planned gifts, it can be problematic to fund a lead unitrust with highly appreciated property. Since a lead unitrust is fully taxable, selling a highly appreciated asset may cause the trust to owe taxes that will deplete its principal. You will want to work closely with your advisors to pick an asset or combination of assets that will best achieve your goals for your gift.

Example

Leslie Alfaro, 60, is financially secure. Leslie has been wanting to make a leadership gift to The LeTourneau University Foundation for some time, but has hesitated to part with her assets because of the two young grandchildren she’d like to provide for when they’re older.

Leslie is delighted to learn that funding a charitable lead unitrust offers an excellent way to provide generous support to The LeTourneau University Foundation and pass assets to her young grandchildren.

Leslie chooses to create a $1,000,000 trust that will pay 6% of its value, as re-valued annually, to The LeTourneau University Foundation each year for 25 years. By making the trust term 25 years long, Leslie delays transferring assets to her grandchildren until they are in their early 30s. By then, she expects them to be mature enough to handle their assets responsibly.

Benefits

  • Leslie’s grandchildren will split approximately $1,282,432* when the trust ends.
  • The assets Leslie uses to fund the trust will not be taxed in her estate.
  • The LeTourneau University Foundation will receive annual payments from the trust that will increase from $60,000 to $76,184* over 25 years.
  • Leslie will receive a gift tax charitable deduction of $785,050**.

* Assumes the trust assets earn a 7% annual net return.
** Leslie’s
charitable deduction may vary depending on the timing of her gift.

“Estate and Legacy Planning” – Does it Really Matter?

Think about this: early in the life of Israel we see the Lord repeatedly reminding them about the importance of passing on to “their children and their children’s children” God’s testimony of faithfulness (Deuteronomy 4:9 and following).  God went on to tell the children of Israel that He wasn't’t talking directly with their children, but rather with them – because “their eyes had seen” all that the Lord had done (Deuteronomy 11:2-7). 

Estate planning, when done with intentionality and by including a narrative of one’s life, can be an incredible means of motivating future generations.  Further empowering such planning with tax wise strategies that endow heirs as well as those ministries that have had an impact upon you and your family assures there is a means by which that consistent behavior is facilitated!

Watch for our next installment where we will purpose to unpack …

  • what estate and legacy planning is
  • why it’s important
  • what it looks like

and most importantly,

  • how it can be a compelling motivation for succeeding generations when it is empowered with an integrated level of charitable gift planning

As always, if we can be of service to you in this area, or for any questions you may have, please do not hesitate to email us at leavealegacy@letufoundation.org or call us toll-free at 903-500-2972 and ask for Tom Bevan.

And always a proper disclaimer: When considering what we might point to by way of a benefit to you in any given situation, always assure to consult your legal and tax advisor for what qualifies as the actual tax treatment of that scenario in your unique situation.

Scholarships play a major role in the lives of LETU students. More than 90% of the student body receives financial assistance from scholarships, grants, and loans. But with graduating seniors incurring significant financial debt, it is our goal to lessen the burden and increase our scholarship aid. Endowed scholarships play a vital role in decreasing the debt burden on students.

Why do LETU alumni and friends choose to establish Endowed Scholarship Funds?

  • To perpetuate the memory or legacy of a loved one;
  • To honor positive role models who have significantly influenced others;
  • To invest in today's students who will influence every workplace and every nation for Christ tomorrow.

Endowed Scholarships provide significant impact:

  • Equip leaders for tomorrow today;
  • Recruit and retain outstanding students seeking the hands-on, Christ-centered education that has for decades been the strength of LETU;
  • Recognize and reward outstanding performance by students with demonstrated financial need.

Endowed professorships, chairs, programs and schools are also available. Call 903.233.3833 to establish your endowment today.

Many companies will match their employees' charitable gifts. Some will even match the donations of retirees or employees' spouses! You can make your money double or even triple and at the same time invest in students' lives.

If your company is eligible, request a matching gift form from your employer's Human Resources department. Complete, sign and send in the completed form with your gift- every time you give a gift! Inform your employer of your donation and give them LeTourneau University's mailing address (2100 S. Mobberly Ave. Longview, TX 75607) so they can make the match. We will do the rest.

Giving a cash gift isn't the only way you can support LeTourneau University students. All you have to do is sign up for all the programs below and then let your shopping do the donating. It's that easy! Your normal, everyday shopping will help the LETU Annual Fund provide scholarship aid to deserving students. Thank you!

Give by Shopping

You're going to buy things anyway, right? Here are some ways your purchase can benefit LeTourneau University.

Amazon Smile
Start your shopping at smile.amazon.com, choose LeTourneau University as your selected organization, and the AmazonSmile Foundation will donate 0.5% of the price of your eligible purchases.

Kroger
If you are a KrogerPlus member, Kroger's Community Rewards program donates a portion of your eligible purchases to the organization of your choice. Choose LETU! Visit https://www.kroger.com/topic/kroger-community-rewards-3 to enroll with your membership card and choose LeTourneau University (NPO# 84780). Don't forget to re-enroll each year to continue in the Community Rewards program.

Tom Thumb
Tom Thumb's Good Neighbor Program allows customers to direct donation dollars to a favorite church, school or other non-profit organization. Visit the courtesy booth at your local store to link your reward card to our account (use our Charity# 9090).

Give by Donating Goods (Gifts-in-Kind)

CONTACT:

Breaking News: New legislation has passed that can grant continued tax incentives for giving in 2021.
Click here for info.  

800.259.LETU [Toll-Free]

903.233.3801 [Fax]

Email
leavealegacy@letufoundation.org

Mailing Address
Office of Development
LeTourneau University
P.O. Box 7333
Longview, Texas 75607-7333