Answers to Your Prospects' Questions: Charitable Remainder Unitrusts

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	1.	A generous donor wants to fund a Charitable Remainder Unitrust (CRUT) with a piece of mortgaged real estate. What options can I suggest? A CRUT cannot be funded with mortgaged real estate. The three best options are: The donor can pay off the mortgage with other assets and funds the CRUT with the real estate. He could even mortgage some other piece of property and then use some of the income from the CRUT to make the mortgage payments. If your charity's gift acceptance policies and your state's regulations allow, the donor can fund a Charitable Gift Annuity (CGA) with the value of the real estate minus the mortgage. The donor can give your charity the property through a bequest.
	2.	What are the benefits of a charitable remainder unitrust? You will receive an immediate income tax deduction for your gift, while also removing a large asset from your taxable estate. If you fund your unitrust with appreciated property, you pay no capital gains tax on the transfer. You can use this most-flexible gift plan to hold temporarily illiquid assets; to invest first for growth and then for income with no reduction for capital gains tax; to address short-term family obligations without making long-term commitments of capital.
	3.	Can I place real estate or personal property in a unitrust? In most cases, yes. Remember that an asset like that may not be producing income, and so the unitrust's beneficiaries may receive little or nothing until a sale and re-investment into income-producing assets.
	4.	Can I include my children as income beneficiaries of my unitrust? It depends on the age(s) of any children you name as income beneficiaries. Our interest in the unitrust must be at least 10% of the value of the assets you donate to it. This interest is calculated using the life expectancies of the income beneficiaries. The younger your children, the longer their life expectancy and the smaller the value of the charitable remainder. Even younger adult children may disqualify the trust.
	5.	Who can serve as trustee of my unitrust? A financial institution, an advisor, or you, yourself, may serve. [Note: Add your organization to this list if your treasurer is agreeable.]

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Answers to Your Prospects' Questions: Charitable Remainder Unitrusts

A generous donor wants to fund a Charitable Remainder Unitrust (CRUT) with a piece of mortgaged real estate. What options can I suggest?

What are the benefits of a charitable remainder unitrust?

Can I place real estate or personal property in a unitrust?

Can I include my children as income beneficiaries of my unitrust?

Who can serve as trustee of my unitrust?

Ask Brian