Charitable Remainder Unitrust

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What is a Charitable Remainder Unitrust?

A Charitable Remainder Unitrust (Unitrust) is a gift plan defined by federal tax law that allows you to provide income to yourself or others while making a generous gift to a charity such as Clark University. The income may continue for the lifetimes of the beneficiaries you name.

How are the rates of a Charitable Remainder Unitrust determined?

As a unitrust donor, you irrevocably transfer assets, usually cash, securities, or real estate, to a Trustee which can be Clark University. The pay-out rate is determined at the time the trust is established. During the unitrust's term, the Trustee invests the unitrust's assets. Each year, the Trustee distributes a fixed percentage of the unitrust's asset value, as revalued annually, to the income beneficiaries. If the unitrust's value goes up from one year to the next, its pay-out increases proportionately. Likewise, if the unitrust¹s value goes down, the amount distributed also goes down.

The payment percentage must be at least 5 % of the trust's annual asset value, and is made out of trust income or trust principal if income is not adequate.

When are payments distributed?

Payments may be made annually, semiannually or quarterly. Unless another option is chosen, we generally make distributions at the end of each quarter (December, March, June and September).