A LIFETRUST EXAMPLE


Here's a simple example of how the LIFETrust works:

Wendy, age 60, receives $100,000 in extra income and is in the 40% tax bracket. If she does nothing, she’ll end up with $60,000. Instead, If Wendy donates to a LIFETrust pooled income fund, naming herself and her spouse (also age 60) as the LIFETrust income beneficiaries, and leaving enough to pay residual taxes, they will lifetime income. After they die, what’s left of the contribution goes to Wendy's selected charity(ies). Here is how Wendy benefits (see assumptions and notes below):

Immediate Charitable Contribution Tax Deduction

$45,877 (56% of the Donation)

Projected Total Lifetime Payments:   

LIFETrust Pooled Income Fund: $142,478 ($4,611/yr) 
“No Action” (if the $60,000 is annuitized): $75,416( $2,441/yr)  
 
Present Value of After-tax Projected Payments (After-Tax):   

LIFETrust:  $70,877
“No Action”: $60,000  

The "tradeoff" is giving up access to the after-tax benefit in exchange for lifetime income for you and/or people you care about on a tax-advantaged basis, while providing a legacy societal benefit. 


Let us show you how a LIFETrust pooled income fund can benefit you and those you care about!


* Assumptions and Notes: (1) The LIFETrust pooled income fund contribution is $81,000 - the balance of the additional income is used to pay remaining current income taxes,
(2) the LIFETrust earns income at 5.75% net (not guaranteed), (3) the combined life expectancy is 30.9 years, (4) LIFETrust income is taxed at a combined 28% rate, (5) the after-tax cash payment is annuitized at 1.5%), and (6) the present value discount factor is 2.5%. Note that the immediate charitable deductible amount will vary based on the ages of the income beneficiaries. See the LIFETrust Q&As for more information.

The site provides educational information. It is not professional tax or legal advice.  Consult with your own professional advisor. 
A LIFETRUST EXAMPLE