The trustee has the responsibility to manage the assets of the trust, make the trust distributions to the beneficiaries, and provide tax statements to the IRS and the beneficiaries. Penn currently provides these services as trustee of many charitable remainder trusts. This is the type of trust described in the example on the preceding page. It is an individual trust paying the beneficiary a fixed percentage of the principal of the trust as it is revalued annually. Generally, a lower payout percentage will allow the trust principal to grow and can result in increasing payouts over time.
Unitrust income is taxed to the donor based upon the type of income earned by the trust.
Additional gifts can be made to a unitrust at any time. Variations on the standard charitable remainder unitrust allow for flexibility to achieve such goals as enhanced retirement planning. This is the same type of gift vehicle as the unitrust except that the income payment is a fixed-dollar amount determined when the trust is established. It provides the security of a steady stream of income. Because the beneficiary will not have the benefit of possible future increases in the value of the trust principal, an annuity trust will generate a larger charitable deduction than a unitrust established in the same amount.