What is a Charitable Remainder Unitrust (CRUT)?

A charitable remainder unitrust (CRUT) is a special, irrevocable trust that offers certain tax benefits to the investor. This irrevocable trust falls under the authority of Internal Revenue Code § 664[1].

The Charitable Remainder Unitrust has two primary characteristics.

Fixed percentage of the value of assets – Once it’s established, the CRUT allocates a fixed percentage of the value of assets to a non-charitable beneficiary, or settlor of the trust. This can be done annually or more frequently if desired.

Fair market value of the remaining assets – At the expiration of the trust, the remainder of the charitable remainder unitrust assets are distributed to charity. Fair market value is determined by the trustee. The fixed annuity percentage is subject to certain rules.

  • It must be at least 5% and no more than 50% of the fair market value of the assets.
  • The remaining amount in the trust (earmarked for charity) must be at least 10% of the fair market value of the assets contributed to the trust.

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If you are ready to set your charitable remainder unitrust up or if you have any questions, please don’t hesitate to contact us. We look forward to working with you!

Other Trusts

Charitable Remainder Trusts (CRT)

This “split-interest” giving trust preserves the value of high-value assets, affords income tax reductions, and is tax exempt for the investor.

Charitable Remainder Annuity Trusts (CRAT)

This type of CRT is based on a fixed percentage of the original trust assets. No additional contributions are allowed.

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