Gift Range: $100,000 or more
The unitrust provides for annual payments of a specified percentage—at least 5% of the value of the trust as it is valued each year—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 the Lewis County Historical Society.
In addition to the income you will receive from the trust, you will also be entitled to a charitable income-tax deduction for the value of the Historical Society’s remainder interest in the trust assets.
The trust requires a trustee, which can be your attorney, your financial advisor or you bank, among others.
Example: John and Mary purchased growth stock for $20,000 ten years ago. It is now valued at $100,000, but the annual dividends are only $1,500. Now that they are both 65, they would like to augment their retirement income. To do this, they transfer the stock to a charitable remainder unitrust with a 6% payout rate.
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 $27,400. In their 24% tax bracket, this saves them more than $6,575 in income taxes (24% of $27,400).
When the last income beneficiary dies (John or Mary), the unitrust assets will benefit the Lewis County Historical Society.
How It Works
- Create trust agreement stating terms of the trust; transfer cash or other property to trustee
- Trustee invests and manages trust assets and makes payments to income beneficiaries you designate
- Remainder transferred to the Lewis County Historical Society for purposes you specify
- Payments to one or more beneficiaries, varying annually with the value of the trust
- Federal income-tax deduction for the charitable remainder value of your interest
- No capital-gain tax when trust is established; property is sold by the trust
Trust remainder will provide generous support for the Lewis County Historical Society