The Unitrust: A Flexible Investment Plan
A Unitrust can be considered a win/win/win gift because of its many benefits. It provides you with a charitable tax deduction (tax avoidance too if funded with appreciated assets,) provides you (and/or your heirs) with a lifetime or term-of-years income, and finally gives you the satisfaction of supporting the work of Cardinal Glennon Children’s Medical Center.

The amount of life income received from a Unitrust is a fixed percentage of the current value of the Unitrust. The value of the Unitrust is determined annually - the percentage is based on your personal circumstances and needs. The minimum payout rate is 5%.
After your lifetime, the principal of your trust is conferred to the hospital.

How a Unitrust Works
To create this plan, you irrevocably transfer cash, securities or real estate to a Unitrust. The trust then pays you an income for life, determined by a fixed percentage you select at the start.

Example: John, age 60, contributes $100,000 in cash to a Unitrust, arranging to receive 7% of the fair market value of the Unitrust assets each year, payable quarterly. The first year he's entitled to $7,000 (7% of $100,000). Each subsequent year the same process is followed. However, as the value of his trust increases or decreases, so do his income payments. (Many younger donors choose a 5% payout rate so that as the corpus grows, the payments keep pace and/or beat the rate of inflation.)

How Income Tax Savings Are Figured
In the year you create and fund a Unitrust, you enjoy a sizable charitable income tax deduction. The deduction is based upon the value of the hospital's right to receive the remainder of the trust assets after your lifetime. The value is determined by official U.S. Treasury average lifetime expectancy tables.

Example: John is 60 years old. According to the table he is entitled to an income tax charitable deduction of $29,693 on the $100,000 in cash he used to fund his Unitrust. This is deductible up to 50% of his adjusted gross income. Any excess is deductible over the next five years.

Suppose John used appreciated securities to fund the Unitrust. He would pay no tax on the appreciation. For securities held long-term, his contribution would be deductible up to 30% of his adjusted gross income. His deduction would be calculated on the current market value of the securities instead of their lower cost basis.

Benefits of Establishing a Unitrust:
1. Income for a term of years or for the rest of one’s life (lives.)
2. Immediate charitable tax deduction savings.
3. A possible hedge against inflation.
4. Freedom from investment worries.
5. Avoidance of capital gains tax if appreciated assets are used to fund the trust.
6. The pleasure of knowing that your gift ultimately will benefit the children served by Glennon.