Charitable Remainder Unitrusts
How It Works
Planned Parenthood Federation of America, Inc., can serve as trustee of a charitable remainder unitrust for gifts of $100,000 or more. You can also select a financial institution to serve as your trustee. Please contact us to discuss further.
The investment strategy for a trust takes into account many factors, including age and payment rate.
If the assets in the trust are liquid, such as cash or securities, typically a unitrust is invested in a balanced portfolio that is designed to produce both income and growth over the term of the trust. If the trust assets are primarily non-liquid assets, such as real estate or personal property, the trust may be held for growth in capital appreciation rather than current income. At some later date, the non-liquid assets could be sold (avoiding capital gains taxes) to be re-invested to produce income for the income beneficiaries.
Gifts of cash or appreciated property yield the same result for tax deduction purposes. However, gifts of appreciated property have the added value of avoiding capital gains taxes.
In most cases, yes. The value of the trust principal will be determined by a qualified appraisal of the property. However, real estate or other property may not be producing income and thus the income beneficiaries may receive no or very little income until these assets are sold and re-invested to produce income.
It depends on the age(s) of any children you name as income beneficiaries. The charitable interest in any trust must be at least 10 percent of the value of the assets donated to the trust. This interest is calculated using the life expectancies of the income beneficiaries. Thus, the younger your children, the longer their life expectancy, and the smaller the charitable remainder value. Even younger adult children may disqualify the trust.
A charitable remainder unitrust is a powerful tool that can save you income, capital gain, estate and inheritance taxes, depending on your circumstances and state of domicile. A qualified advisor is crucial to assist you in maximizing these benefits.