To encourage your philanthropy, the federal government provides you with generous tax benefits. The trust then pays an income for life determined by a fixed percentage agreed upon at the start. Each subsequent year the same process is followed. However, as the value of his trust increases or decreases, so do his income payments. Your income varies with the value of the unitrust, but you receive the same percentage every year, even if the unitrust income is less than that percentage.
Any difference is drawn from capital gains or principal.
An income-only option is available so that if the actual income amount is below the stated percentage, you receive only that amount. Deficiencies will be made up in later years, when the unitrust income exceeds the stated percentage. This option is attractive if you want the unitrust to hold some unproductive real estate until it can be sold at the best price and the funds reinvested. In the year you create and fund a unitrust, you get a sizable income tax charitable deduction. This is based upon the value of the right of Rollins College to receive the remainder of the trust assets after your lifetime.