The Charitable Remainder Unitrust pays you a fixed percentage of the fair market value of the Trusts assets, as revalued each year. Like the Annuity Trust, you can claim a charitable deduction on your income tax return the year that you create the Trust. The payments you receive are taxed as ordinary income, and in some cases as capital gains or tax-free return of principal.

For example, Mr. John J. Jones irrevocably transfers $500,000 to create a Charitable Remainder Unitrust that will provide him with life income payments. The Trust Agreement provides that he will receive 8 percent of the fair market value of the assets each year. If the Trust income exceeds the stated payout percentage, the excess is added to the assets of the Unitrust and reinvested. The first year he receives $40,000 (500,000 x 8%). One year later the Trust assets are valued at $600,000, so he is paid $48,000 ($600,000 x 8%). If the Trust assets are worth $700,000 at the beginning of the next year, he will receive $56,000 ($700,000 x 8%). This scenario will continue year after year until the death of Mr. Jones. At that time, the value of the Trust will go to the WUSA Endowment Fund for use as so designated by Mr. Jones.