Example: Charitable Remainder Unitrust
< Back

Kevin Mainland wishes to provide an income for his wife, aged 68, and to establish a scholarship fund for chemistry students. With a parcel of unencumbered real property purchased seven years ago and currently valued at $200,000, he creates a net income charitable remainder unitrust that has income payments of 5 percent. This gift entitles Mr. Mainland to a charitable deduction of approximately $101,688. Income payments begin upon sale of the property. Mrs. Mainland can expect initially to receive approximately $10,000, and the amount will change annually thereafter depending on the value of the trust principal. For example, if the trust principal increases to $220,000, Mrs. Mainland’s income will increase to approximately $11,000. Over her lifetime, Mrs. Mainland can expect the trust principal to provide increased income in an inflationary market. Oberlin will establish the scholarship fund after Mrs. Mainland’s death.

< Back