3 advantages of establishing a charitable remainder unitrust at Duke
Many people assume that planned giving means making a gift after your lifetime (such as through your will). While including a charity in your estate plans may be the most common planned giving method, it certainly isn’t the only way. In fact, there are many ways you can make a gift now and support your favorite charity (like Duke) down the road. One of these methods is through a life income gift known as a charitable remainder unitrust (CRUT).
In simple terms, a CRUT is an arrangement whereby in exchange for your gift, you or your loved ones receive an income for life or for a number of years. After that time, the balance of the trust is applied to the program or area you have designated at Duke (such as scholarships, athletics, or cancer research). You can set up a CRUT during your lifetime or through your will.
A CRUT can be a creative way to meet your personal and financial goals while making a tangible impact at Duke. For example, you may choose this type of gift to help provide for your children or to care for elderly parents. Or you can set up a CRUT for a term of years to assist in funding a large expense, such as college tuition. There are many reasons why you may consider a CRUT at Duke and we encourage you to carefully review your options with your financial advisor.
Here are three advantages of establishing a CRUT at Duke:
1. Receive income for you and/or your loved ones
When you create a CRUT, you or your designated recipients receive income payments based on a fixed percentage of the trust’s balance every January (referred to as the CRUT’s “annual valuation date”). Your income will vary from year to year, depending on the trust’s investment performance. This type of gift may help protect against inflation. If you prefer fixed payments, a charitable gift annuity might be a better option for you.
You can establish a unitrust at Duke with a gift $100,000 or more and can add to it during your life. After you have passed away, the remainder of your gift will be used as you have directed at Duke.
2. Receive a charitable income deduction
When you create a CRUT, you receive an immediate income tax deduction for a portion of the gift, which can be spread over as many as six consecutive tax years. If your gift is funded with appreciated assets (like stock), you can also reduce or avoid your capital gains liability.
While most unitrusts are established with cash or appreciated assets, you can also use real estate or other tangible personal property (like art work or collections) to fund this type of gift.
3. Make a significant gift that benefits you now and Duke later
Establishing a CRUT allows you the satisfaction of knowing you will be making a real difference at Duke. Your support can be used to provide financial aid for deserving students, strengthen academic programs and faculty, and maintain campus treasures like the Sarah P. Duke Gardens. There is no limit to the potential!
If you would like to learn more about CRUTs, please visit our website or watch our Unwrapping Gifts CRUT video. Our team of charitable planning experts would be happy to speak with you and your financial advisor about whether this gift may be right for you.