Endowment Trust

How a Charitable Remainder Unitrust Works

You make a gift of an appreciated asset (or cash) to the Unitrust, which may then be sold by the Unitrust without paying capital gain tax. The sale proceeds are invested in one of our model portfolios and you will begin to receive payments for life or, if you so choose, for a term or years (not to exceed 20 years). About 75% of your payment will be taxed at capital gain tax rates or as qualified dividends under current tax law.

You are entitled to a charitable deduction for a portion of the value of the gift. If a gift of cash, the deduction may be claimed up to 60% of your adjusted gross income. Deductions for gifts of appreciated assets may be claimed up to 30% of your adjusted gross income. Unused deductions may be carried forward for up to five additional years.

When the Unitrust ends, assets remaining in the trust are distributed and used as you have designated.

Unitrust Payments

CRUT payments are a fixed percentage of the annual value of the trust assets. CRUT assets are revalued each year as of the first business day of the year, and trust payments reflect asset value increases or decreases. Investment returns in excess of the stated trust payout rates are retained in the trust, on a tax-sheltered basis, and build trust values.

About 75% of your payment will typically be taxed at capital gain tax rates or as qualified dividends.

Fees & Expenses- TBD by Administrator

Additional Details

• There can be no binding sale agreement in place before a gift.

• Gifts over $5,000, may require an appraisal.

• Assets subject to debt require special planning.

Using Life Insurance to fund a trust. 

An endowment trust is a type of life insurance policy that provides a death benefit and also allows policyholders to gain access to a portion of the cash value of their policy. 

The cash value accumulates over time, allowing policyholders to access it to pay for expenses like college tuition or to supplement retirement income. 

The death benefit is paid to a named beneficiary upon the death of the policyholder. Endowment trusts are a great way to provide financial security for your family and to create a lasting legacy.