A charitable remainder untirust offers lifelong income and charitable deductions, just as a gift annuity does. The unitrust, however, is market-sensitive, providing a potential protection against inflation. To establish a unitrust, an irrevocable donation of cash, securities or property is placed in a pool of assets managed by SPU's investment professionals. Because the fair market value of trust assets is reassessed each year, payments typically increase annually. The charitable remainder unitrust can be adjusted to meet many situations.
Payments can extend for the donor's life, or for two lives, or a fixed period of years.
Sometimes the donor can receive lifetime payments and pass the yearly payment to an heir for up to 20 years. Donors may even opt to keep some of the original asset. When a unitrust is established, the donor selects a permanent payment rate between 5 and 8 percent. Although a 5 percent rate offers a smaller initial payment, the donor's patience eventually pays off with larger payments and a greater gift to SPU because more growth has been reinvested in principal. The donor receives a tax deduction for the probable benefit to the University after the Unitrust's payments end.