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Endowment Trust

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Judi Woods

Owner | Agent

Endowment Trust

How a Charitable Remainder Unitrust Works

You make a gift of an appreciated asset (or cash) to the Unitrust, which may then be sold by the Unitrust without paying capital gain tax. The sale proceeds are invested in one of our model portfolios and you will begin to receive payments for life or, if you so choose, for a term or years (not to exceed 20 years). About 75% of your payment will be taxed at capital gain tax rates or as qualified dividends under current tax law.

You are entitled to a charitable deduction for a portion of the value of the gift. If a gift of cash, the deduction may be claimed up to 60% of your adjusted gross income. Deductions for gifts of appreciated assets may be claimed up to 30% of your adjusted gross income. Unused deductions may be carried forward for up to five additional years.

When the Unitrust ends, assets remaining in the trust are distributed and used as you have designated.

Unitrust Payments

CRUT payments are a fixed percentage of the annual value of the trust assets. CRUT assets are revalued each year as of the first business day of the year, and trust payments reflect asset value increases or decreases. Investment returns in excess of the stated trust payout rates are retained in the trust, on a tax-sheltered basis, and build trust values.

About 75% of your payment will typically be taxed at capital gain tax rates or as qualified dividends.

Fees & Expenses- TBD by Administrator

Additional Details

  • There can be no binding sale agreement in place before a gift.

  • Gifts over $5,000, may require an appraisal.

  • Assets subject to debt require special planning.

Using Life Insurance to fund a trust. 

An endowment trust is a type of life insurance policy that provides a death benefit and also allows policyholders to gain access to a portion of the cash value of their policy. 

The cash value accumulates over time, allowing policyholders to access it to pay for expenses like college tuition or to supplement retirement income. 

The death benefit is paid to a named beneficiary upon the death of the policyholder. Endowment trusts are a great way to provide financial security for your family and to create a lasting legacy.

Endowment Trust Trust Fund Charitable Giving Permanent Fund Beneficiaries Donors Principal Income Distribution Investment Management Financial Security Tax Benefits Philanthropy Nonprofit Organizations Estate Planning Asset Protection Capital Preservation Endowment Growth Spendable Income Charitable Contributions Grantmaking Nonprofit Sustainability Donor Intent Long-Term Giving Legacy Planning Foundation Endowment Policies Gift Agreement Restricted Funds Unrestricted Funds Charitable Impact
Endowment Trust

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The creation of an Endowment Trust signifies a commitment to enduring positive change through Charitable Giving. As a dedicated Trust Fund, it establishes a Permanent Fund designed to benefit chosen Beneficiaries and causes. Donors, driven by a desire for impactful philanthropy, contribute the Principal amount to initiate the endowment. This initial sum, managed through meticulous Investment Management, aims at both Capital Preservation and Endowment Growth, ultimately providing Financial Security for the long term. The establishment of an Endowment Trust also brings Tax Benefits to Donors, fostering an environment where giving aligns with financial planning. This act of Philanthropy isn't merely transactional; it holds a key role in Estate Planning, safeguarding assets and providing for Charitable Contributions that outlive the donor. Nonprofit Organizations, recipients of endowment support, experience enhanced Nonprofit Sustainability. The consistent Income Distribution from these trusts empowers Grantmaking and Charitable Contributions that bolster their mission and reach. By upholding Donor Intent, these organizations ensure that the impact of an Endowment Trust resonates deeply with the Donors' values and wishes. As a manifestation of Long-Term Giving, Endowment Trusts embrace the principles of Asset Protection and Capital Preservation. They serve as a foundation for thoughtful Legacy Planning, where the impact of Charitable Giving extends beyond a single lifetime. This commitment to Charitable Impact goes beyond immediate contributions, establishing a legacy within Foundations and Nonprofit Organizations, guided by Endowment Policies and Gift Agreements. Whether directed towards Restricted Funds with specific purposes or Unrestricted Funds for adaptive use, Endowment Trusts stand as a testament to a profound vision for lasting change. Through strategic Financial Planning, these trusts not only create a legacy but also shape a brighter future for society through thoughtfully managed Charitable Giving.

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Judi Woods

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