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 for life or a term of years while making a generous gift to Salus University or one its Colleges. At this time the foundation that receives all contributions in support of the University and its Colleges continues to be named the Pennsylvania College of Optometry Foundation. Trusts that bennefit the University or its Colleges should still be made to the PCO Foundation.
As a unitrust donor, you irrevocably transfer assets, usually cash, securities, or real estate, to a trustee of your choice (for example, 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% 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 PCO Foundation to benefit the University or one of its Colleges for the purpose you designate.
If you irrevocably transfer $50,000 in cash to a unitrust that pays 5% of its value each year for the lifetime benefit of an individual, age 72,
Your Benefits Include:
- You will qualify for a federal income tax deduction of approximately $28,281. Your deduction may vary modestly depending on the timing of your gift. Note that deductions for this and other gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, take unused deductions of this kind on tax returns over the next 5 years, subject to the same 50% limitation.
- Your designated income beneficiary will receive payments in quarterly installments for life. In the first year, these payments will be about $2,500; payments in future years will vary with the value of the unitrust.
- Your estate may enjoy reduced probate costs and estate taxes.
- You will provide generous support to Salus University or one of its Colleges.
- Your gift will benefit from expert asset management.
For More Information
Lynne C. Corboy,
Director of Development