Giving Now
Charitable Remainder Trust (Unitrust)
A Charitable Remainder Unitrust is like a combination of a gift and an investment plan.
A Charitable Remainder Unitrust is like a combination of a gift and an investment plan. You place assets in trust and you (and/or another beneficiary) receive lifetime income from them. At the termination of the unitrust Maryknoll receives the remainder.
With a unitrust, the amount you receive as income is a set percentage of the value of the trust assets, determined annually. It may be an excellent way to devise a supplemental retirement plan, or to help pay for an education or care for older relatives.
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Name: |
Michael Chang |
| Age: |
62 |
| Situation: |
Looking for ways to help with his grandson's college education. |
| Gift Plan: |
Created a charitable reminder trust which will last the four years his grandson is in college. |
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One of Mr.Chang's grandchildren is beginning college next year. To help with the expenses, Mr. Chang decided to create a charitable remainder trust that will last for the four years his grandson is in college. The trust will be funded with mutual funds that have increased in value over the years but yield little income.
Each year a fixed sum will be paid to his grandson. Earnings of the trust and the assets in the trust, if necessary, will be used to fund the payout.
Because the trust will last only 4 years, Mr. Chang benefits from an income tax deduction equal to a large percentage of the values placed in the trust. He decides to use the tax savings to purchase a life insurance policy on his life, naming his other grandchildren as beneficiaries, thereby providing funds to "replace" the amount used to create the charitable remainder trust.
The funds left in the trust at the end of the four years will be used to fund a memorial gift in memory of Mr. Chang's wife.
Case Studies are composites of Maryknoll Donors. The names and images are fictional but the cases use real data and situations. Figures are for demonstrational purposes only
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