A charitable remainder unitrust, which differs from a charitable remainder trust, carries the features of other charitable remainder trusts, but the value of its assets is variable. There is potential either for growth or decline in the amount of the payments received by the designated beneficiaries.
A charitable trust attorney can assess your situation and help you determine if a unitrust is the best option for you.
Why choose a charitable remainder unitrust?
With this type of trust, often abbreviated as CRUT, assets are revalued on an annual basis. So if the value of the assets attached to the trust drop during a given year, the beneficiaries’ trust income also will drop. Conversely, beneficiaries will receive an increase in payment if the trust’s assets appreciate.
At least 5% of the trust's annual value must be payments, which are made out of the trust’s income. If the income is unable to cover the total amount, payments will pull in money from the trust’s principal.
Another feature of a unitrust is that supplemental funds may be added after the initial funding. Many younger individuals or risk takers favor the growth potential a charitable remainder unitrust offers to offset inflation.
For those thinking about investing in a unitrust, there are other considerations to keep in mind, such as:
- economic expectations;
- other income sources; and
- your risk tolerance, as well as those of your recipients.
Contact a Charitable Trust Attorney
To learn more about these features or to discuss a charitable remainder trust, talk with one of our charitable trust attorneys at Unruh Turner Burke & Frees. We can be reached at our offices in West Chester: (610) 692-1371; Phoenixville: (610) 933-8069; and Malvern: (610) 240-0750.