Perhaps the most flexible of the charitable gift planning strategies, the charitable remainder unitrust enables viewers to provide future support for Thirteen while achieving personal objectives such as providing for heirs; enhancing their retirement income; diversifying investments and saving taxes.
How a Unitrust Works
A unitrust can be funded with cash, stocks, bonds or real estate. It pays you, or someone you designate, income for life or for a term of years. The income is a set percentage of 5% or more which you choose at the start. At the beginning of each year the assets in the trust are valued, and the trustee knows how much to pay out the next year. When the trust ends, whatever remains is distributed to Thirteen.
There are several possibilities as to how the income is paid out to the income beneficiaries. One option allows the donor to accumulate assets in the trust until a time when income is most needed (such as after retiring). Another option makes it easier to fund the trust with property that is not producing income and may take some time to sell (real estate, for example). Still another possibility would allow one to pay a student’s college tuition with the payments before Thirteen receives its ultimate gift.
Add Up the Benefits
A unitrust offers many advantages:
- In the year you create and fund a unitrust, you get a sizable income tax charitable deduction.
- If you use appreciated securities to fund a unitrust, you may completely avoid capital gains tax on the appreciation. And, your deduction is based on the current market value, not the cost basis.
You can direct income to yourself or to someone else to accomplish personal goals
For more information
For a discussion of how you might benefit from such an arrangement, contact your attorney or speak with us in the Office of Planned Giving at Thirteen by calling (212) 560-4989 or emailing us at firstname.lastname@example.org.