Charitable Remainder Unitrust
A charitable remainder 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 Babson College. The income may continue for the lifetimes of the beneficiaries you name, a fixed term of not more than 20 years, or a combination of the two.
As a unitrust donor, you irrevocably transfer assets, usually cash, securities, or real estate, to a trustee of your choice (for example, Babson College or a bank trust department).
During the unitrust’s term, the trustee invests the unitrust’s assets. Each year, the trustee distributes a fixed percentage of the unitrust’s current value, as revalued annually, to your income beneficiaries.
If the unitrust’s value goes up from one year to the next, its payout increases proportionately. Likewise, if the unitrust’s value goes down, the amount it distributes also goes down. For this reason, it may be to your advantage to choose a relatively low payout percentage so that the unitrust assets can grow, which, in turn, will allow the unitrust’s yearly payments to grow.
When the unitrust term ends, the principal passes to Babson College, to be used for the purpose you designate. You may add funds to your unitrust whenever you like.
- You will qualify for a federal income tax deduction.
- The income beneficiaries you name will receive annual income for life, or for the period you designate.
- If you fund the trust with an appreciated asset and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on all of the capital gains realized in the sale.
- Your estate may enjoy reduced probate costs and estate taxes.
- You will become a member of the Roger and Grace Babson Legacy Society.
- You will provide generous support to Babson College.
*Note: The information on this site is not intended as legal, "tax" or investment advice. For such advice, please consult an attorney, "tax professional" or investment professional.