Charitable Remainder Unitrusts
You can take care of yourself and take care of Stanford with a charitable remainder unitrust. In this arrangement, you irrevocably transfer assets to a trustee that invests the trust’s assets and pays you and/or other beneficiaries variable annual payments for life and/or a term of years.
A unitrust is an excellent vehicle for gifts of appreciated stock or property because the trust is tax exempt and does not pay capital gains tax when it sells the assets. The full sales proceeds remain in the trust to provide a payout to the income beneficiaries. The amount of the payout for the income beneficiaries will depend on whether the charitable remainder unitrust is set up as a standard unitrust, net income unitrust, or flip unitrust (see below). The payout distributed is generally taxable to the income beneficiaries. Upon establishing a charitable remainder unitrust, you are entitled to a current income tax deduction for a portion of the value of the gift transferred to the trust, which is often between 30 and 60 percent of the value of the assets transferred. Stanford serves as trustee of many charitable remainder unitrusts.
Benefits
Variable income, based on a percentage of the fair market value of the trust assets, revalued each year
Federal, and possible state, income tax charitable deduction
Pay no immediate capital gains tax on the transfer of appreciated assets
Reduce or eliminate estate taxes
Diversify your investments
Make a gift to Stanford
This might interest you if...
You want to make a gift to Stanford and you:
Want to receive an income for life, based on a percentage of the fair market value of the trust investments, revalued each year
Have assets that you are able to give away. Assets that work especially well include:
Cash or funds earning low interest rates
Appreciated securities
Appreciated real estate, including a vacation home or investment property
Your personal residence if you are planning a move
Have a large part of your portfolio in one company and want to diversify your investments
Would like to have a charitable remainder unitrust managed by Stanford
Want to reduce your current income taxes with an income tax charitable deduction
Stanford as trustee
When you establish a charitable remainder unitrust, you will select who will be the trustee of the trust. Stanford is willing and qualified to serve as trustee, if certain requirements are met. The minimum funding amount to establish a charitable remainder unitrust with Stanford as trustee is at least $200,000, with the actual minimum determined based on the term of the trust and the payout rate.
If you would like to learn more about Stanford serving as trustee of a charitable remainder unitrust, please contact us.
Investing your unitrust
When Stanford serves as trustee of a unitrust, there are various options for how the trust can be invested, including an option that the funds may be invested with the Stanford University endowment. For information about the investment options for charitable remainder unitrusts for which Stanford serves as trustee, please contact us.
Assets used
Cash, securities, real estate, or other assets.
Contact us
If you are interested in learning more about creating a unitrust, please contact us. We would be happy to provide you with information about how a charitable remainder unitrust would work for you based on your circumstances.
Those considering a planned gift should consult their own legal and tax advisors. The staff in the Office of Planned Giving are happy to speak with advisors as well.
Types of Charitable Remainder Unitrusts
There are three types of unitrusts: a standard unitrust, a net income unitrust, and a combination or “flip” unitrust. The income from each trust will vary from year to year, and the right choice will depend on your goals. You can name yourself and/or other beneficiaries to receive income for life and/or for a term of up to 20 years.