Charitable Trusts

A charitable remainder unitrust is just another term for the standard charitable remainder trust. Other forms of the term are "Charitable Unitrust," "Charitable Uni-Trust," and "Charitable Remainder Uni-Trust." Some have also been known to use the misnomer "Charitable Remainder Unit Trust." Each of these terms refers to the same sort of structure, the basic CRT.

In order to qualify as a unitrust, the donor must draw income from the trust corpus (or principal) at a rate of not less than 5% per year. The percentage is calculated based on the size of the principal on an annual basis.The trust typically continues for the life or lives of the income beneficiaries. Alternatively, a charitable remainder unitrust may be set up to last for a term of years. The maximum term under this arrangement is twenty years.

The unitrust is one of two main varieties of charitable remainder trust, the other being the charitable remainder annuity trust. The unitrust differs from the annuity version in that its income payout can vary significantly depending on the investment performance of the trust. It allows for great flexibility and control as to how the assets are invested, so there is the potential to greatly grow the size of the trust over time. The annuity version, by contrast, typically offers set income for life (sometimes adjusted for inflation).

Charitable Trusts | Privacy Policy | Legal Disclaimer | Contact Us |