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1501 Mendocino Ave.
Santa Rosa, CA 95401-4395
Charitable Remainder Unitrust with
SRJC Foundation as Trustee
A charitable remainder unitrust is a gift vehicle which irrevocably transfers the remainder interest of an asset’s value to Santa Rosa Junior College Foundation upon the death of the named income beneficiaries or at the end of a specified term of not more than twenty years. The donor can name him or herself and/or others as income recipients, with payments made concurrently or consecutively.
In a unitrust, the donor creates a formal trust arrangement through which donated assets may be transferred to the SRJC Foundation as trustee. The donor cannot stipulate in the trust agreement that the original assets placed in the trust be retained for the life of the trust. These assets are then managed according to the investment strategy of the trustee.
Types of unitrust gifts:
- Straight Unitrust – This type of unitrust pays a fixed percentage of the net fair market value of its assets, as valued annually (January 1) to the designated beneficiaries. Additional contributions may be added at any time.
- Net Income Unitrust – This agreement stipulates that the trust will distribute either the actual amount of income earned or the established percentage payout rate, whichever is less.
- Net Income Unitrust with Make up Provision – This agreement uses current excess income from the trust to pay the beneficiary(ies) income lost during the years when earnings are insufficient to reach the established percentage.
Minimum Funding Level:
The minimum suggested amount to establish a qualified charitable remainder unitrust is $100,000 and the charitable contribution, computed using standard government tables, should be the greater of $50,000 or 25% of the initial level of funding.
Minimum Age Levels:
The minimum age of beneficiaries for all life income gifts is 50 years old at the time payments begin. The minimum age, however, is not applicable for trusts of terms of years and the payment rate is subject to negotiation. For donors below 50, in special cases, approval may be granted by the Board of Directors.
Rate of Payment:
In accordance with IRS regulations, the fixed percentage cannot be less than five percent (5%) and is established when the trust is created and cannot be changed. The maximum payment limitations are dependent upon the ages of the beneficiaries, type of trust, anticipated investment strategy, and prevailing economic conditions.
Gifts of cash and appreciated securities are appropriate for any of the three types of unitrust. Charitable remainder unitrusts funded with real estate or other non-liquid assets shall take the form of a “net income” or “net income with make-up” unitrust. The net income unitrust (with or without make-up provisions) is the best way to handle gifts of real estate, which would temporarily provide no income between the closure of the gift and the date the property is sold. In a net income arrangement, no payments are due to the beneficiary(ies) until the trust is generating income. However, the trust remains intact.
Charitable Gift Annuity
Charitable Remainder Unitrust with SRJC Foundation as Trustee
Charitable Remainder Annuity Trust with SRJC Foundation as Trustee
Charitable Lead Trust
Retained Life Estate
Gifts of Retirement Plan Interests