By Crystal Langdon

www.crystalclearfinances.com 

There are several ways an individual can continue to provide for their family while financially supporting New Yorker’s Family Research Foundation (NYFRF). In past articles, I have discussed the advantages of the Donor Advised Fund and Charitable Gift Annuities. This time I am going to discuss the advantages of creating specialized gift plans. The basis for many of these customized plans is the creative use of Unitrusts.

The Unitrust is a tax exempt trust that entitles the donor to bypass capital gain tax and receive an income stream for life, based upon a fixed percentage of the trust’s value each year. In addition to the income stream, the donor receives an income tax deduction in the year of the gift.

The Unitrust can be used in several specialized plans. The first gift plan is to combine a Unitrust with an Irrevocable Life Insurance trust. The donor places their assets into the trust for NYFRF and in return receives a tax deduction and an income stream. They can take the income stream and pay the premium for life insurance. After the donor passes away, the principal of the trust goes to NYFRF and the proceeds of the life insurance trust goes to the family members’ estate. The family members do not pay estate or income tax on the money they receive for the life insurance trust.

Another combination for a Unitrust is called a Home Buy-Down. This is for individuals who have significant equity in their house and would like to downsize or move into a town house or retirement center. The Unitrust / Home Buy-Down allows part of the house to be placed into a charitable trust and the balance sold for cash. The person may take a charitable deduction for the portion transferred to the trust.

Life Estates Reserves are another real estate option. This opportunity is for individuals who own a house or a farm and would like to remain there for life. They can receive a charitable deduction by giving the remainder interest to NYFRF. The individuals continue to live in the home for their entire lives and are responsible for maintenance, taxes and insurance. When he or she passes away, the charity receives the property. This can be based upon a single or married couples’ life span.

An Education Unitrust allows a donor to place appreciated assets into a charitable trust and receive a tax deduction as well as income stream. This income stream can be used to pay college expenses for children or grandchildren.

These creative uses of Unitrusts provide individuals an opportunity to give to NYFRF now or in the future. It also allows the donors to benefit from tax deductions, life time income stream, efficient planning of their estate, and the satisfaction of knowing that the ministry of NYFRF will continue because of their efficient estate and gift planning.