Charitable Remainder Unitrust

The unitrust provides for annual payments of a specified percentage to the designated beneficiary(ies). Since the value of trust assets may vary from year to year, the payments may also vary. At the death of the last income beneficiary, the trust principal is distributed to UJA-Federation.

In addition to the income the donor will receive from the trust, the donor may also be entitled to a charitable income-tax deduction for the value of UJA-Federation's remainder interest in the trust assets.

Gift Range: $100,000 or more

Example: George and Mary Carlson are 65 years old, have assets exceeding $10 million, and are looking to reduce their assets in order to avoid paying a large estate tax. Included in their assets is stock purchased ten years ago for $20,000 which is now valued at $100,000.

In the first year, they will receive a $6,000 payment—four times the dividends they have been receiving—and those payments will increase in time if the assets of the unitrust appreciate in value. Moreover, they avoid tax on their profit in the stock and receive an income-tax deduction of about $25,831. In their 24% tax bracket, this saves them more than $6,199 in income taxes (24% of $25,831).

When the last beneficiary of Mr. and Mrs. Carlson dies, the unitrust assets will benefit UJA-Federation.

Want to see a diagram about how a charitable remainder unitrust works? View the diagram of this gift

More Information