You can benefit from the tax savings that result from supporting the Marine Corps Scholarship Foundation 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 the the Scholarship Foundation:

A charitable lead annuity trust pays a fixed amount each year to the the Scholarship Foundation 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 the the Scholarship Foundation go up as well.

For Example

father with child George would like to support the Marine Corps Scholarship Foundation and provide for his children, as well as the children of his fellow Marine and Navy Corpsman. Following his adviser's recommendation, George funds a charitable lead annuity trust with assets valued at $2,500,000.

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

His gift tax deduction is $2,182,775* against the $2,500,000 of assets. Therefore, only the difference ($317,225) is subject to gift tax, which is offset against his lifetime gift tax exclusion. After that, the remaining trust assets and all of their growth will pass to his family at zero additional cost in gift and estate taxes. Had George given the $2,500,000 outright to his children, it would have been a taxable gift.

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

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Next Steps

  1. Contact Lindsay Cameron at 571.386.2643 or lindsay.cameron@mcsf.org to talk about supporting the Scholarship Foundation by setting up a charitable lead trust.
  2. Seek the advice of your financial or legal adviser.
  3. If you include the Scholarship Foundation in your plans, please use our legal name and federal tax ID.

Legal Name: Marine Corps Scholarship Foundation Inc.
Address: 909 N. Washington Street, Suite 400, Alexandria, VA 22314
Federal Tax ID Number: 22-1905062

Here to Help

Lindsay Cameron
Assistant Director, Gift Planning
571.386.2643
lindsay.cameron@mcsf.org

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