Charitable Remainder Unitrust – The Most Flexible Life Income Gift

What is a Charitable Remainder Unitrust?

A Charitable Remainder Unitrust is a separately invested and managed charitable trust that pays a percentage of the principal, re-valued annually, to you, your spouse or other income beneficiaries for life or a maximum term of 20 years. You receive a charitable income tax deduction for a portion of any gift you make to the trust. After the unitrust terminates, the accumulated principal or "remainder interest" goes to Trinity School. Recommended minimum gift is $100,000. For those who can make a gift of this size, the advantages can be considerable.

The Unitrust Advantage: Flexibility

The most flexible life-income plan, unitrusts are a powerful vehicle for benefiting yourself, your heirs and Trinity. You can use almost any asset to fund a unitrust, including cash, publicly traded stocks and bonds, closely held stock, partnership interests and real estate. You can tailor your unitrust to meet many financial or estate planning goals. You can choose to receive income beginning immediately or you can defer most of your income to a future time. If you are relatively young and insurable, you can even use some of the income or tax savings produced by your plan to purchase a life insurance policy that replaces your gift and flows to your heirs outside of your estate (this is called "wealth replacement"). The Office of Development and Alumni Relations can help you fashion the right unitrust to achieve your goals.

What Are The Other Advantages?

• Receive a charitable income tax deduction for a portion of your gift.
• Avoid ALL capital gains tax on any appreciated assets you donate at the time of funding.
• Depending on how the trust is invested, much of your income can be treated as capital gains income taxable at the 15% rate.
• Unitrusts are usually written to allow you to make additional gifts at any time.
• May reduce your estate tax liability if you have a taxable estate.
• Your income can increase over time if the underlying investments perform well (particularly appealing to younger donors and income beneficiaries).
• The satisfaction of making a substantial gift to Trinity School during your lifetime.

Example

A 55 year-old donor in the 35% tax bracket establishes a unitrust with $100,000 of appreciated stock, originally purchased for $10,000. Unitrust pays donor 5.0% of the trust assets re-valued annually for life. Trust earns a 8% average total return. Assume IRS discount rate of 3.2%.

PLEASE NOTE: This example is for illustrative purposes only and is not intended as legal or tax advice. Consult your legal and tax advisors prior to making any material decisions based on this data.

For more information

E-mail us, complete the Personal Illustration form, or call us at 212-932-6859 so that we can assist you.