REMAINDER UNITRUST BEQUEST
How does a Charitable Remainder Unitrust work?
You establish a charitable remainder unitrust naming Grand Piano Series as beneficiary, and transfer cash, securities, or other property into the trust. The trust pays a percentage of its principal value to you or your designees every year. This trust can provide lifetime income, or income for a specified number of years. You receive an immediate income tax deduction for a portion of your contribution to the trust and pay no capital gains tax on appreciated assets. You can even add additional assets to the trust over time to increase tax benefits and charitable impact. Grand Piano Series receives the remaining trust assets when the trust terminates.
Will my income from the trust be taxed?
Yes. The income received from the unitrust will be taxed based on the type of investments held in the trust and the payout rate. If you have a mixture of investments, ordinary income rates apply to the first increment of your payout (up to your full payment), followed by any capital gains, and then tax free return of principal if your total payout exceeds the investment returns in a particular year. These taxes would also apply if you took these payments from a regular account, so it really should not increase your taxes substantially.