Charitable Remainder Unitrust

A charitable remainder unitrust is an irrevocable contract that may or may not transfer ownership of an asset to Taylor University and provide the donor with income for life or a term of years.  If the William Taylor Foundation and/or Taylor University are to serve as trustee without compensation, no charitable unitrust shall be entered into with a donor for a sum of less than $50,000 with 100 percent of the remainderment given to the William Taylor Foundation and/or Taylor University.  When other charities are named as beneficiaries with the William Taylor Foundation acting as trustee, the minimum amount is $100,000 with at least 50 percent of the remainderment going to the William Taylor Foundation and/or Taylor University.

If Taylor is the trustee, we agree to pay the donor a fixed percentage of the trust assets as revalued annually. When you fund the trust with an appreciated asset and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on all the capital gain realized in the sale. An excellent instrument for individuals in a high tax bracket who have highly appreciated assets, the charitable remainder unitrust provides tax savings by eliminating all capital gains taxes.

During the unitrust's term, the Foundation invests the unitrust's assets. Each year, the Foundation distributes a fixed percentage of the unitrust's current value, as revalued annually, to your income beneficiaries. If the unitrust's value goes up from one year to the next, its payout increases proportionately. Likewise, if the unitrust's value goes down, the amount it distributes also goes down.

For this reason, it may be to your advantage to choose a relatively low payout percentage so that the unitrust assets can grow, which in turn will allow the unitrust's yearly payments to grow.

Payments must be a minimum of 5% of the trust's annual value and are made out of trust income, or trust principal if income is not adequate. Payments may be made annually, semiannually, or quarterly.

When the unitrust term ends, the unitrust's principal passes to the Foundation, to be used for the purpose you designate. You may add funds to your unitrust whenever you like.

You will likely qualify for a federal income tax deduction. Note that deductions for gifts of long-term appreciated property will be limited to 30% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, carry forward unused deductions for up to five years, subject to the same 30% or 50% limitation.

Ask for a personal proposal.