Charitable Remainder Unitrust
A trust document tailored to your needs is drafted, and income from the trust goes to the beneficiaries you specify. Beneficiaries receive income for life or for a specified number of years, and at the end of the trust term, the assets of the trust will benefit any LCC program you choose.
There are four types of Charitable Remainder Unitrusts:
- A standard unitrust pays the stated amount from the trust regardless of how much income is earned. The payout is the stated percentage of the trust assets as valued annually.
- A net income unitrust pays the stated amount from the trust to the extent of income earned in the trust without invading principal. The payout is the stated percentage of the trust assets as valued annually.
- A net income with makeup unitrust pays the stated amount from the trust to the extent of income earned in the trust without invading principal. It has the ability to makeup income in subsequent years if the income earned is less than the stated payout rate.
- A flip unitrust is a net income unitrust that "flips" to a standard unitrust when a specified date or event occurs such as a birth, a death, or the sale of a hard-to-market property.
Before you begin, you need to make sure your financial and legal advisors are part of your gift strategy team. A charitable remainder unitrust can have an impact on other parts of your financial and estate plan. The professional staff at the LCC Foundation can assist you and your advisors in the creation of trust documents.
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