When would I use a charitable remainder uni-trust/charitable remainder annuity trust in my Pennsylvania estate planning?

You would use a charitable remainder uni-trust/charitable remainder annuity trust when you wish to reduce your income and estate taxes as well as provide a contribution to the charity of your choice. A qualified Pennsylvania estate attorney can help you weigh the pros and cons of each type of trust and ensure it is properly established.

A charitable remainder uni- trust/charitable remainder annuity trust works by allowing you to transfer an asset (such as real estate or stocks) into the trust. The trustee will then sell the asset at full-market value in order to reinvest the proceeds into other assets to produce income.

The trust will then pay you or your designated beneficiary an income for the rest of your life. After you die, the remaining assets from the trust will be donated to your chosen charity.

As mentioned earlier, a charitable remainder uni-trust/charitable remainder annuity trust allows you to reduce your income and estate taxes. In addition to the tax breaks, a charitable trust also allows you to avoid capital gains tax, which would significantly reduce the amount you would receive if you had sold your assets on your own.

The difference between these types of trusts is the way in which the income is paid out each year. With a charitable remainder uni-trust, you or your beneficiary will receive a percentage of the principal value each year.

This amount is revalued on an annual basis. A charitable remainder annuity trust, on the other hand, provides fixed annual payments.

Contact a Pennsylvania Estate Attorney

Establishing a trust is a wise business decision, but can become complicated. The Pennsylvania estate attorneys at Unruh, Turner, Burke & Frees are dedicated to helping you with your trust and estate needs. Contact our law office at 610-692-1371 (West Chester), 610-933-8069 (Phoenixville), or 610-240-0750 (Malvern) or fill out our convenient online form today.

References:

http://plannedgiving.med.upenn.edu/charitableremainderunitannuityrust.php

https://www.thecolemanlawfirm.net/What_is_a_CRT.php

http://www.charitabletrust.com/faq.aspx?id=9

David M. Frees, III
Attorney, Speaker and Author