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Charitable Remainder Unitrusts
Charitable Trusts - in General
If you are interested in maximum flexibility and effectiveness from your gift, consider charitable remainder trusts (CRT's) at Soroptimist.
- Our unitrust pays you and/or other beneficiaries a variable income stream based on the annual value of trust assets. Income in excess of the percentage payout is reinvested. Once the trust term expires, any remaining assets pass to Soroptimist.
- Our annuity trust pays you and your beneficiaries a fixed income stream based on the initial value of trust assets. Income in excess of the percentage payout is reinvested. Once the trust term expires, any remaining assets pass to Soroptimist.
CRT's may pay income to multiple beneficiaries, for life or a term or years. A unitrust may be structured to invest solely for growth for a term of years. This is an attractive way to help provide additional retirement income or income for college tuition while also making a substantial gift to Soroptimist. An annuity trust may hold tax-free securities and pass tax-free income through to the beneficiaries.
You, your financial institution, or Soroptimist may elect to serve as the trustee or co-trustee of a CRT.
What is a Charitable Remainder Unitrust?
A Charitable Remainder Unitrust is a separately invested and managed 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" passes to Soroptimist. 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, a unitrust is a powerful vehicle for helping yourself, your heirs and Soroptimist. 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 achieve 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, such as retirement. 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"). We can help you customize the right unitrust to achieve your goals.
What Are The Other Advantages?
- Upfront charitable income tax deduction for a portion of your gift.
- Avoidance of ALL capital gains tax on any appreciated assets you donate to the trust.
- Depending on how the trust is invested, some of your income can be treated as capital gains income taxable at the favorable 15% rate.
- Ability to make unlimited, additional, tax-saving contributions.
- Reduced exposure to estate taxes.
- 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 Soroptimist during your lifetime.
If you are interested in maximum flexibility and effectiveness from your gift, consider the charitable remainder trusts (CRT's) of Soroptimist.
- Our unitrust pays you and/or other beneficiaries income as a fixed percentage of the principal. The unitrust is revalued annually, and income in excess of the percentage payout is reinvested.
- Our annuity trust pays you and your beneficiaries a fixed income.
CRT's may pay income to multiple beneficiaries, for life or a term or years. A unitrust may be structured to invest solely for growth for a term of years, an attractive way to help provide for future retirement or tuition needs while also making a substantial gift to Soroptimist. An annuity trust may hold tax-free securities and pass tax-free income through to the beneficiaries.
You, your financial institution, or Soroptimist may serve as the trustee of a CRT. We presently ask for a minimum gift of $100,000 to establish a unitrust that we will trustee.
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Example
Comparison of Benefits: Unitrust and Annuity Trust
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This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates.
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Assumptions:
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> Beneficiaries aged 72 and 70
> 28% income tax bracket
> Holding $100,000 in stock with $50,000 cost basis
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Unitrust
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Annuity Trust
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Contribution
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$100,000
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$100,000
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Income Rate
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5%
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5%
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First Year's Income
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$5,000
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$5,000
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Future Income
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Variable
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$5,000/year
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Charitable Deduction*
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$43,764
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$43,367
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*Based on a Federal Discount Rate of 5%.
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More
To learn more about Charitable Remainder Unitrusts, Email us, complete the Information Request form, or call us at (215) 893-9000 so that we can assist you. |
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