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Charitable Remainder Unitrust

A Charitable Remainder Unitrust is a qualified irrevocable trust which makes payouts to the donor or to the donor's family members for life or over a period of years. After the payouts have been completed, the remainder is distributed to qualified charities. The person who establishes the trust may select the person(s) to receive payouts from the trust, and the charity or charities which will receive the principal of the trust after payouts are completed. The major benefits of the trust are:

  • Capital gains tax advantage
Capital gain is not realized when the trust sells assets. Thus the full amount received from the sale is effectively reinvested. If you sold the asset yourself and funded the unitrust with the proceeds, you would realize the capital gain and have to pay the tax on it.
  • Increased income
Mature investment assets frequently earn between 2% and 4% per year. The unitrust enables an asset with low income to be sold without tax, and the proceeds invested in assets earning a higher income.
  • Income tax deduction
An immediate charitable income tax deduction is available to the trust's grantor.

Covenant Trust Company® serves as trustee for Charitable Remainder Unitrusts as well as other trust types. We will serve as trustee without charge as long as 50% or more of the residue remaining at the death of the last income beneficiary or $50,000 (whichever is greater) is designated for one or more Covenant ministries of the donor’s choice.

Does a unitrust sound attractive for your situation? Request more information through our info page or give us a call. [view Directory]

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