Charitable Trusts

The term "Charitable Remainder Unit Trust" is actually a misnomer. The correct term is "Charitable Uni-Trust," which is just another name for a Charitable Remainder Trust. They are structured in exactly the same way, with income beneficiaries receiving income derived from assets during their lifetimes, and the remaining assets going to one or more charities when the beneficiaries pass away.

The misnomer probably arose from a combination of factors. First, there is a type of non-charitable entity called a "Unit-Trust." These are in fact SEC regulated investment companies, which provide for group ownership of assets. They are similar in some regards to mutual funds, with some important differences. Many of them are traded openly on various stock exchanges.

Second, Charitable Uni-Trusts are alternatively referred to as "charitable unitrusts," which might look like a type to someone familiar with the "Unit-Trust" structure.

In any event, someone who speaks of a "charitable remainder unit-trust" is more than likely referring to the standard form of charitable remainder trust, where a donor receives a certain percentage of the value of the trust assets annually as income. For more information, see the uni-trust links on the menu to the right.

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