Charitable Remainder Trusts

A charitable remainder trust is established by irrevocably transferring assets to a trustee you select, subject to a written trust agreement. The trustee invests the assets and pays the income to you or another beneficiary you select, for life or for a term of twenty years or less. At the end of the trust term, the assets will pass to United Way.
The market value of the assets are deductible for federal estate tax purposes.

There are two types of charitable remainder trust:

1. Charitable Remainder Unitrust
   1. The beneficiary is paid a fixed percentage, but not less than 5%, of the fair market value of the trust, revalued annually.
   2. If the value of the trust increases, the income paid to the beneficiary increases. Conversely, if the value of the trust decreases, the amount paid to the beneficiary each year also decreases. The unitrust provides a hedge against inflation.
   3. Additions can be made to a unitrust.

2. Charitable Remainder Annuity Trust
   1. The beneficiary is paid a fixed dollar amount each year which is based on a percentage, but not less than 5%, of the fair market value of the trust at inception.
   2. Additions cannot be made to an annuity trust.
   3. The charitable income tax deduction is higher for an annuity trust than for a unitrust.

For more information please contact Mark Spaulding at 707.528.4485 x112.