|
||||||||||
|
Charitable Remainder Unitrust Planning Tips
The unitrust pays you a fixed percentage of gradually increasing principal. Sierra Nevada Memorial Hospital Foundation offers an alternative version designed to hold a temporarily illiquid asset or a portfolio of growth securities for a period of time, while it pays the beneficiaries the lesser of the unitrust amount or the actual trust net income. Called a net-income unitrust, this option is useful to donors who want to make a gift and secure a tax deduction now but who don't need income back immediately.
A net-income unitrust can continue for its entire term, or it can make up the accrued difference between actual income payments and the unitrust amount in a specified number of years when it earns surplus income. An attractive option is the flip unitrust, which changes from an income-only payout to a fixed-percentage distribution when a pre-arranged event occurs – such as the beneficiary turning 65 or the property in the unitrust is being sold. See a flip unitrust gift example
A net-income unitrust can change its investments to income instruments with no capital-gains liability. Therefore, it is an attractive tool for younger donors to build a supplementary retirement or tuition fund that will grow tax-free, and then distributes income when they and their family need it most.
Sierra Nevada Memorial Hospital Foundation can assist you and your advisors in considering the alternative of a net-income unitrust.
Consider these ideas to benefit yourself and Sierra Nevada Memorial Hospital Foundation
- Education Trust: Create a trust for a term of years, using the income to fund a loved one's education. At the end of the term, the remainder passes to the Foundation to use where you have designated.
- Special Needs Trust: Your charitable unitrust can pay income to a separate plan set aside to meet the needs of a loved with a qualified disability.
- Parents' Trust: If you're providing annual income to parents, consider establishing a trust that pays income to them; you receive a charitable deduction at the time of funding and help both the Foundation and your family.
For assistance with this gift plan, please complete the request information form or contact Kimberly Parker at (530) 477-9700 or e-mail to kparker@snmhf.com.
