The Charitable Remainder Unitrust

A charitable remainder unitrust (CRUT) is a gift plan defined by federal tax law that allows you to provide income to yourself or others for life or a term of years while making a generous gift to Wooster.

As a unitrust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, Wooster or a bank trust department). During the unitrust's term, the trustee invests the unitrust's assets. Each year, the trustee pays a fixed percentage of the unitrust's value, as revalued annually, to one or more income beneficiaries named by you. Payments must be at least 5 percent 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 College of Wooster, to be used for the purpose you designate.

Example:

You irrevocably transfer $100,000 in property, with a cost basis of $50,000, to a unitrust that pays 5 percent of its value each year for the lifetime benefit of an individual, aged 65. You will qualify for a federal income-tax deduction of approximately $46,954 with no tax on capital gain. Your designated income beneficiary will receive approximately $5,000 in payments in the first year. Payments in future years will vary with the value of the unitrust.

Back