Charitable Remainder Trust

CHARITABLE REMAINDER TRUSTS provide income for you or your family today and funding for the Jewish community in the future. There are two types of charitable remainder trusts—a Unitrust and an Annuity Trust—and both provide you with an immediate tax deduction and lifetime income. Upon your death, the remaining assets will be used to support the charitable purposes that you specify.

How Does It Work?

You make an irrevocable transfer of cash, securities, or real estate into a trust today or as part of your estate plan.

What Differentiates a Unitrust from an Annuity Trust?

Unitrust
The Unitrust provides for a percentage of the trust’s assets (valued annually) to be paid each year to you or your named beneficiary for life or a fixed term of years.

The Unitrust provides a hedge against changes in the economy through the payment of a fixed percentage of the assets. If the actual investment yield of the trust is less than the specified percentage, the amount distributed may include some of the principal. If the investment yield is more than the specified percentage, the excess will be added to the principal. If the value of the trust assets increases, the amount paid to the income beneficiary will increase, and vice versa.

Annuity Trust
With an Annuity Trust, you or your beneficiary receive a fixed amount, rather than a percentage of the trust’s assets, each year for life. Unlike the Unitrust, the annual annuity payment in an Annuity Trust does not fluctuate over time with the value of the trust’s assets.

What Are The Benefits?

• You can provide immediate payments for yourself, a spouse, child, or other individuals. Charitable remainder trusts for persons other than you or your spouse may have gift tax consequences.
• You receive a charitable income tax deduction for the portion of the transfer that represents the charitable gift.
• A portion of your income payment is tax-free.
• Assets remaining in the Unitrust or Annuity Trust continue to support the charitable causes you care about for future generations.

Jewish Federation of Greater Pittsburgh is not a licensed tax, legal or investment advisor, and this information is not advice. Consult your estate planning professional or accountant for information.