Frequently Asked Questions
- What is a Charitable Remainder Unitrust?
- What Formats are available for Charitable Remainder Unitrusts?
- What are some possible, personal financial benefits for creating a Charitable Remainder Trust?
- Who are the Candidates for a Charitable Remainder Trust?
- How is the income tax charitable deduction calculated for a gift to a Charitable Remainder Trust?
- What are the gift and estate tax consequences of retaining an income interest in a Charitable Remainder Trust?
- What tax and information returns are required after a Charitable Remainder Trust is created?
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What are the Annual Valuation Rules for Charitable Remainder Unitrusts? and Why are the Annual Valuation Rules Important?
The net fair market value of a Charitable Remainder Unitrust’s assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations made on more than one date during the taxable year of the trust, so long as the same valuation date or dates and valuation methods are consistently used each year.
Multiple valuation dates, while helping to balance payout fluctuations, are usually impractical from an administrative standpoint. Therefore, the vast majority of unitrust instruments provide for one valuation date each year. However, if an additional contribution is made on other than a valuation date, that property is valued on the date of contribution and the unitrust amount is adjusted to reflect the unitrust amount attributable to the additional contribution for the balance of the trust's taxable (calendar) year.
To enable the trustee to plan for required distributions and to easily determine the value of publicly traded securities held by the trust, most trust instruments designate the first business day of each calendar year as the annual valuation date. Designating an annual valuation date that falls after a required payment date requires the trustee to guess the future value of trust assets in order to determine the unitrust amount and, therefore, is not generally recommended
- What is a Charitable Remainder Annuity Trust?
- What Factors Should I Consider When Choosing a Payout Format for my Charitable Remainder Trust?
- How do I select a measuring term for my Charitable Remainder Trust?
- What are some methods of income deferral within a Flip Charitable Remainder Unitrust (Flip-CRUT) or a Net Income with Makeup Charitable Remainder Unitrust (NIMCRUT)?
- What is a Flip Charitable Remainder Unitrust (Flip-CRUT)?
- What are the Typical Responsibilities of a Trustee of a Charitable Remainder Trust?
- What is an “Independent” Special Trustee (IST)? When is an IST used in Charitable Remainder Trust Planning?
