Charitable Remainder Unitrusts
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 Music Center.
The unitrust advantage: flexibility
The most flexible life-income plan, a unitrust is a powerful vehicle for benefiting yourself, your heirs and Music Center. 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"). We can help you fashion the right unitrust to achieve your goals.
Additional advantages:
- Receive a charitable income tax deduction for a portion of your gift.
- Avoid all upfront capital gains tax on any appreciated assets you transfer to the unitrust.
- Reduce your estate tax liability by removing a large taxable asset.
- Increase your income over time if the value of the unitrust grows (particularly appealing to younger donors and income beneficiaries).
- You have the satisfaction of making a substantial gift to Music Center during your lifetime.
Example
Comparison of Benefits: Unitrust and Annuity
Trust |
This
example is based on a factor that changes monthly. Contact our office
for a personal illustration based on the latest rates. |
Assumptions: |
> Beneficiaries
aged 72 and 70
> 28% income tax bracket
> Holding $100,000 in stock with $50,000 cost basis |
. |
Unitrust |
Annuity Trust |
Contribution |
$100,000 |
$100,000 |
Income Rate |
5% |
5% |
First Year's Income |
$5,000 |
$5,000 |
Future Income |
Variable |
$5,000/year |
Charitable Deduction* |
$43,764 |
$43,367 |
*Based on a Federal Discount
Rate of 5%. |
More
To learn more about charitable remainder unitrusts, Email us, complete the Information Request Form, or call us at 213-972-3333, select Gift and Estate Planning so that we can assist you.
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