Charitable Remainder Unit Trust
A donor may elect to create a separate life income trust to provide either
a variable or fixed income trust. The fixed income approach is called
a Charitable Remainder Annuity Trust and is described in the next section.
The Charitable Remainder Unitrust provides income to the donor, or a designated
non-charitable beneficiary, based on a fixed percentage payout rate (not
less than 5 percent of the fair market value of the trust assets determined
The income from the trust continues for the rest of the donor's life
(or for the life of another non-charitable beneficiary), and in certain
cases, may be passed on to a survivor if the donor desires. Further a
donor may establish an income interest for a beneficiary other than him/herself.
For example, a parent or other individual the donor wishes to aid or support.
ADVANTAGES: Creating a Unitrust entitles the donor to a charitable deduction
for the value of The Foundation’s remainder interest, and/or based
on the age of the income beneficiary. Transfers are exempt from capital
gains tax and the same limitations and carryover provisions apply as previously
stated. In addition, the donor receives a guaranteed income for life and
The Foundation receives a significant gift in their name.
Charitable Remainder Annuity Trust
If the donor is concerned primarily with receiving, (or having their designated
beneficiary receive) a specified amount during the term of the trust,
they may prefer to establish an Annuity Trust. In this case, the required
annual income distribution amount is predetermined by the donor at a minimum
of 5 percent of the fair market value of the trust assets at the date
the assets are transferred to the trust. The same tax deduction, limitation
and carry-over regulations apply to the Annuity Trust agreement as in
the Unitrust agreement.
ADVANTAGES: Creating a Charitable Remainder Annuity Trust entitles the
donor to a charitable deduction for the value of The Foundation’s
remainder interest, exactly as it does when property is transferred to
a Charitable Remainder Unitrust. Transfers are exempt from capital gains
tax and the same limitations and carry-over provisions apply as with the
other agreements. In addition, the donor will have the satisfaction of
making an important investment in the mission of The Foundation.
The Foundation encourages supporters to consider opportunities to provide
significant support for the future through testamentary wills and trusts.
When planning your estate, you can consider an outright bequest to The
Foundation. Also, certain bequests in trust are not subject to estate
taxation. As in the case of lifetime gifts, the donor's exclusion,
because of the special statutory tax benefits which are granted for charitable
contributions, is the face value of the gift rather than the actual cost
which may be considerably less. A bequest should always be drawn by, or
with the advice of an attorney. A bequest can be any of the following:
1. A Specific Bequest of a dollar amount or of particular securities or
other property; 2. A Residuary Bequest of all, or a portion of your estate,
after payment of specific amounts to other beneficiaries; 3. A Contingent
Bequest to take effect only in the event that the primary beneficiaries
under your Will die before you; 4. A Testamentary Trust, which takes the
form of a Charitable Remainder Unitrust or a Charitable Remainder Annuity
Trust, the corpus of which will be paid to The Foundation upon death of
the trust's income beneficiary.
Many individuals want to give to The Foundation but do not have the financial
resources. Gifts-in-kind affords them the opportunity to give items or
properties which are valuable to the organization for either utilization,
or to sell. Examples include: office furniture, waiting room furniture,
real estate, computers, television sets, etc. If you have a gift that
you would like to donate, please call The Foundation Office at (337) 494-3226
to discuss the type of gift you have and to determine whether The Foundation
can accept your generosity.