John Marsh*, a successful stockbroker interested in the research of angiogenesis pioneer Dr. Judah Folkman, owns stock currently valued at $1 million, for which he paid $500,000. Mr. Marsh transfers the stock to a 7 percent charitable lead annuity trust, naming Children's as the beneficiary for ten years. At the end of the trust term Mr. Marsh's daughter will receive the assets remaining in the trust, resulting in a taxable gift of $437,850 ($1 million less $562,150). Because Mr. Marsh has made no prior taxable gifts, the gift to his daughter would be sheltered under Mr. Marsh's unified credit. Assuming an 8 percent annual return during the trust term, the trust:

• Received $1,144,000 for the daughter, passed at a lower cost than if the money had been held and taxed in his estate
• Donated $700,000 to Children's to support Dr. Folkman's pioneering work
• Gained a reduction or possible elimination of estate and gift taxes on the gifted property

*This donor's name has been changed to protect his anonymity.