What is a charitable remainder unitrust?
1. Request a personalized illustration for your client using our request form, or email a gift planner. To create a customized illustration for your client, Thrivent Charitable requires the following information:
- Client's name, birthdate, and tax bracket; and,
- Proposed gift amount, including cost basis.
2. Thrivent Charitable sends you an illustration packet to review with your client.
3. If your client wishes to proceed and establish a unitrust, complete and return the charitable remainder trust application, IRS Form W-9, and fund workbook, as well as the complex gift asset questionnaire, or real estate questionnaire (depending on the type of gift).
- Clients 50 or older, but may be younger for a term-of-years trust;
- Clients interested in additional income who can withstand market fluctuations;
- Clients with significant assets;
- Clients interested in converting the real estate into a gift that provides a stream of ongoing income;
- Clients who wish to give real estate and bypass associated gains;
- Clients who may wish to make additional gifts to the trust at a later date;
- Clients who are seeking ongoing income for long-term care or wealth replacement insurance premiums; and
- Clients with property they are no longer interested in maintaining.
- The trust beneficiaries receive regular payments for life, term or years, or both.
- The donor receives a charitable income tax deduction in the year of the gift based on the value of the real estate/complex assets, determined by a qualified appraisal. The cost of the appraisal is paid directly by the donor to the appraiser.
- For gifts of long-term appreciated real estate or complex assets, the annual deduction limit is 30% of the donor’s AGI.
- Unused charitable deductions may be carried over an additional five years; and
- The unitrust sells appreciated assets tax-free – proceeds are reinvested to produce income.
Thrivent Charitable will support you with a full range of charitable products and services, and you'll be compensated for your efforts by Thrivent or American Funds.
The gift minimum for real estate is $200,000. The donor can also make multiple additional gifts of cash, securities, and/or real estate to the trust, which would increase the annual unitrust distribution.
Payments can be paid to the donor, a relative or friend, and are taxable as income. There may be estate/gift tax consequences if someone other than the donor or the donor’s spouse is named as an income recipient.
Unitrust payout rate
In determining a payout rate, Thrivent Charitable looks to various factors, including the current economy, the prevailing IRS discount rate, and the age of the trust income beneficiaries. Once the percentage has been set in the signed trust document, it cannot be changed. The variable annual payment rate is calculated annually, based on the percentage in the trust agreement and the overall value of the trust’s assets. Payments begin in the calendar year following the sale of the property/complex gift assets. The donor(s) and certain family members are disqualified from purchasing the property according to law.
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Our team of charitable gift planners utilizes deep charitable expertise to expand your clients' options and help meet their giving goals. Our collaborative approach will allow you to maintain your current client relationships while we provide the most relevant advice that aligns with your clients' financial priorities.
From left to right: Cindy Aegerter, Ben Boline, Nikki Johnson, Greg Shamey