Charitable Remainder Unitrust (CRUT)
The Charitable Remainder Unitrust allows you to set aside a portion of your assets as a gift for Stonehill while you maintain, and even enhance, your present and future income.
A Unitrust can help you:
- Increase current income from appreciated assets
- Obtain a generous income tax charitable deduction
- Bypass a hefty capital gains tax
- Realize a savings on estate taxes
- Further the educational mission of Stonehill College
When you establish a Charitable Remainder Unitrust, you donate cash or property to fund the trust. The trust pays you variable income for life. With the Unitrust, you have potentially a wonderful safeguard against inflation. As the value of the trust increases, so does your income.
If you are considering the sale of highly appreciated growth stock, real estate, or any property with an appreciated value, you should consider a Charitable Remainder Unitrust.
Here is an example:
Don purchased ABC stock 15 years ago for $100,000. This growth stock is now worth $200,000 and pays him approximately 2% income per year, or $4000. While selling the stock would net an impressive profit, it would also trigger a hefty capital gains tax of approximately $15,000.
Instead of selling the stock, Don can set up a trust to pay income equal to 6% (note that percentage rates will vary based on the donor's situation) of the value of the trust assets to himself and his wife, Mary. Since the trust assets in the first year equal $200,000, his income from the trust is $12,000 -- three times more than he earned off the 2% dividends.
In addition to receiving income Don will receive a charitable deduction, avoid the capital gains tax, and reduce his taxable estate for estate tax purposes.