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  4. Charitable Remainder Unitrusts

Charitable Remainder Unitrusts

How Does It Work?

You can establish a charitable remainder unitrust by irrevocably transferring assets to a trustee, who then invests the trust’s assets and pays you and/or other beneficiaries an annual variable income. At the end of the trust term, the assets remaining in the trust are distributed to California Western for the purpose you designate.

A charitable remainder unitrust is an excellent vehicle for gifts of appreciated stock or property, because the trust is tax exempt and does not pay capital gains tax when it sells the assets. The full sales proceeds remain in the trust to provide a payout to the income beneficiaries. The payout distributed is generally taxable to the income beneficiaries. Upon establishing a charitable remainder unitrust, you are entitled to a current income tax deduction for a portion of the value of the gift transferred to the trust, which is often between 30 and 60 percent of the value of the assets transferred.

Benefits:

  • Variable income, based on a percentage of the fair market value of the trust assets, revalued each year.
  • Federal, and possible state, income tax charitable deduction.
  • Pay no immediate capital gains tax on the transfer of appreciated assets.
  • Reduce or eliminate estate taxes.
  • Diversify your investments.
  • Make a gift to California Western.

This Might Interest You If…

You want to make a gift to California Western and you:

  • Want to receive an income for life, based on a percentage of the fair market value of the trust investments, revalued each year.
  • Have assets that you are able to give away. Assets that work especially well include:
    • Cash or funds earning low interest rates.
    • Appreciated securities.
    • Appreciated real estate, including a vacation home or investment property.
    • Your personal residence if you are planning a move.
  • Have a large part of your portfolio in one company and want to diversify your investments.
  • Want to reduce your current income taxes with an income tax charitable deduction.

Assets Used: Cash, securities, real estate, or other assets.