CHARITABLE REMAINDER UNITRUST
You may want to consider setting up a charitable remainder unitrust as a way of making deferred contributions to the Sisters of the Holy Family while taking a current charitable deduction and retaining an income stream for yourself from the transferred property.This form of estate planning also will provide you with estate tax relief by removing assets from your estate, particularly highly appreciated property.
The appreciated assets that you transfer to a charitable remainder unitrust can be sold by the trust without paying any capital gain.The full proceeds of the sale can then be invested in income producing assets, which can increase your income stream. This allows you to diversify your assets, or dispose of an asset that is generating little or no income, without paying capital gains tax.
For the rest of your life, the trust pays you an income. The income is a fixed percentage of the current fair market value of the trust assets at the beginning of each year. The percentage is set by you upon the creation of the trust, but cannot be lower than 5%. If the value of the trust increases from one year to the next because the investment return is greater than the fixed percentage payout, then your income also increases.
One major advantage is the sizable income tax deduction when gifts are made to the trust. The amount of the income tax deduction is based on the value of the property transferred, your age, and the fixed percentage you have chosen to receive. You may make additional gifts to the trust at any time. An additional income tax deduction will be available for those gifts, and your income will increase as a result of the increase in the value of the trust.
Your contributed assets can be sold by the trust which is tax-exempt and reinvested without incurring a capital gains tax.Your income stream may be increased if the property you place in the trust is sold and the full proceeds reinvested at the current market rates. Your estate tax may be reduced.
The trust pays you a fixed percentage of the current fair market value of the trust assets each year. The amount may not be less than 5% determined at the time the trust is created. The income may likely increase as the value of the assets increases. The unitrust can also receive additional contributions at any time.
You, your spouse, or another person designated by you, will receive the income from the trust.At the end of the trust term, the trust is dissolved and all of its assets are then transferred to the Sisters of the Holy Family. Your name and your gift will enable the Sisters to continue their mission in today's world and to care for their elderly and frail members.
We suggest that you discuss this with your own attorney or financial advisor to understand the advantages for you of using a unitrust in your estate planning. Then, contact the Sisters' Development Director for details about your plan for funding and the trustee for your unitrust.
The minimum age for a beneficiary is 55 and the minimum gift required to establish a unitrust is $75,000.
For detailed information and advice, please consult your attorney, insurance broker and finance planner.
For more information about the Sisters of the Holy Family, Planned Giving Program, contact Linda Micciche, Director of Development, at 510-624-4581, or e-mail at linda.micciche@holyfamilysisters.org.
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