Giving through
a Remainder
Unistrust

MISSOURI SOUTHERN FOUNDATION
In Support of Missouri Southern State University

The charitableRemainder Unitrust is an irrevocable trust very similar the Annuity Trust. The primary difference is rather than a fixed annual payment the income from the trust is a percentage of the current fair market value of the property transferred, determined annually. Some advantages of the Remainder Unitrust are:

• Unlike an annuity trusts the donor can add additional assets to the trust over time.
• Because the annual payment is variable, based on the fair market value of the property, the unitrust provides a hedge against inflation.

• As an irrevocable gift, a portion of the assets placed in trust is treated as a charitable deduction. The exact amount of the deduction depends on the age of the donor, percentage of payout, and other factors.

• Assets in a trust bypass probate, and may help avoid estate taxes.

• Since the assets are not considered part of your estate, they pass directly to the Missouri Southern Foundation insuring your privacy by avoiding public scrutiny as part of the probate process.

• Your assets are not subject to probate costs.

• The donor is relieved of managing the investment since the trustee takes this responsibility.

Here is one example of a charitable Remainder Unitrust:

Mrs. Smith is a widow, owns a farm, and wants to make a gift to The Missouri Southern Foundation while receiving an income for life. Currently the farming operation is netting $6000 a year. Mrs. Smith would like an increased income, but does not want to pay the capital-gains tax due if she sells the farm herself.

Mrs. Smith decides to transfer the farm into a charitable remainder unitrust. The trustee sells the property for $160,000 and reinvests the proceeds. Each year Mrs. Smith is paid 6.5 percent of the fair market value of the trust, determined annually. 6.5 percent of 160,000 at the end of the first year equaled $10,400. By creating a charitable remainder unitrust, Mrs. Smith was able to make a large gift to the College, avoid capital-gains tax on the sell of the property, and increase her annual income $4,400 the first year.

This is only one example of how a charitable remainder unitrust can be used to meet the needs of a donor. In all cases, donors should consult their attorney, accountant, or estate planner when considering gift giving.