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LIFE INCOME GIFTS
Unitrusts and Annuity Trusts
If you want maximum flexibility and maximum effectiveness in your giving, consider a Charitable Remainder Trust (a CRT) benefiting Home of Hope. CRT’s come in two versions. A unitrust pays you and/or other beneficiaries income as a fixed percentage of value of the trust principal. The unitrust is revalued annually and income in excess of the percentage payout is reinvested. Alternately, an annuity trust pays you and your beneficiaries a fixed income. CRT’s may pay income to multiple beneficiaries, for life or a term of years. A unitrust may be structured to invest solely for growth for a term of years, an attractive way to help provide for future retirement or tuition needs while also making a substantial gift to Home of Hope. An annuity trust may hold tax-free securities and pass tax-free income through to the beneficiaries. You, your advisor or a financial institution may serve as the trustee of a CRT. Home of Hope can provide advice and sample forms to help you set up your trust.
CHARITABLE LEAD TRUST
The Charitable Lead Trust generates income for Home of Hope now, while reducing your tax costs for transferring assets to the next generation. The lead trust holds gift assets for your lifetime or for a term of years, and pays annual income to us. Home of Hope benefits from the assured income stream from the lead trust, while your family enjoys several tax advantages:
- The gift assets placed in the lead trust are frozen in value for transfer-tax purposes as of the date the trust is formed. When the trust terminates and the assets pass to your family, all intervening appreciation will escape gift and estate tax.
- Our income interest further reduces the taxable value of the trust assets when they pass to your family. This feature makes the lead trust especially useful if you are holding assets likely to appreciate significantly before they are transferred to the next generation.
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