– Charitable Remainder Trust – Unitrust
AN IRREVOCABLE LIFE INCOME GIFT – VARIABLE STREAM OF INCOME
A Charitable Remainder Unitrust (CRUT) is an agreement in which you irrevocably transfer assets to a trustee. The trustee can be the Community Foundation.
How it works:
- The Trust provides income to you or another income beneficiary you name for life – or for a specified number of years (up to 20 years).
- You specify the payout rate when the Trust is established.
- The annual payout is a fixed percentage of the value of the Trust funds, revalued annually. The payout percentage may not be less than 5% – nor more than 50% – of the value of the Trust assets.
- There are four kinds of CRUTS: Standard CRUT, Net Income with Make-up (NIMCRUT), Net Income without Make-up (NICRUT), and the Flip Trust. (We can provide information to you about the various benefits and tax implications of these four types of Charitable Remainder Unitrusts.)
Benefits to you:
- You receive income for life which may be higher than you are currently earning from your other investments.
- You may add to the Trust at any time.
- A unitrust may serve as a hedge against inflation.
- You get an income tax deduction for creating the Trust equal to the charitable remainder interest. You may save estate taxes and probate costs later because of the Trust.
- You make a gift to charity while also retaining annual income for life for yourself or to use to help loved ones, i.e., helping to pay a niece’s, nephew’s, or grandchild’s education.
