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Caring For Generations

Charitable Remainder Unitrusts Deal With the Now and the Later On

by | Feb 28, 2024 | charitable estate planning, charitable giving


Our work at Geyer Law, as we guide Indiana families through the estate planning process, is always “two-faced”, constantly considering both the “now” and the “later” aspects of each part of a family’s plan.

One valuable, 3-stage tool clients can use to address both present and future needs is the Charitable Remainder Unitrust

  1. In Stage One, a donor transfers property or cash into an irrevocable trust.
  2. In Stage Two, the trust pays income to one or more beneficiaries (either for a specific term or for the life of those beneficiaries).
  3. At the end of that payment stage, in Stage Three, the remainder of the assets in the trust are given to one or more charitable organizations.

How does a Charitable Remainder Unitrust help with the “now”? There are several benefits:

  • When you transfer an appreciated asset to the trust, you can qualify for an immediate charitable income tax deduction.
  • When the property is sold inside the trust – to convert it to an income-producing asset – you pay no capital gains tax.
  • It now becomes possible to generate current income (to yourself or to beneficiaries).
  • With the assets held in an irrevocable trust, they are protected from the beneficiaries’ creditors in certain circumstances.
  • The assets held in the trust grow tax-free.

How does a Charitable Remainder Unitrust help with the “later” in your estate plan? At the end of your life you will have the satisfaction of knowing that:

  • …after your death, there will be no estate tax on the assets in the trust, no court decision, no “settling” or debate needed – the trust assets have been assigned to precisely where you chose for them to be.
  • …the assets you assigned to the CRUT are benefiting precisely the charitable organizations whom you chose to help.
  • …the “remainder” of the capital in the trust will be helping to support organizations you have trusted and causes in which you have believed.

In estate planning, we like to remind our Geyer Law clients, before they begin to choose recipients of assets they’ve been fortunate enough – and smart enough – to accumulate, it makes sense to put themselves first, considering their own needs for the rest of their lives. “Only then,” we caution, “will it be time to consider a wealth transfer plan to incorporate philanthropic causes that have been important to them and their loved ones.”

For many, Charitable Remainder Unitrusts are one way of dealing with both the now and the later on.

– by Rebecca W. Geyer