A Unitrust refers to a trust from which a fixed percentage of the net fair market value of the trusts assets valued annually, is paid each year to a beneficiary. In these trusts, the donor transfers property to a trust after retaining the right to receive payments from the trust for a specified term. Once the term ends, the trust estate is paid to a public charity designated by the donor. During a unitrust's term, a trustee invests the unitrust's assets and pays a fixed percentage of the unitrust's current value, as determined annually, to the income beneficiaries. If the unitrust's value goes up, its payout increases proportionately. Likewise, if the unitrust's value goes down, the amount it distributes also declines. Payments must be at least five percent of the trust's annual value and are made out of trust income, or trust principal if income is not adequate.
Oregon Charitable Remainder Unitrust
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Setting up a charitable remainder trust (CRT) involves several key steps, starting with a thorough evaluation of your assets. You will need to draft a trust agreement that specifies the terms, including beneficiary designations and payout rates. Again, turning to US Legal Forms can greatly simplify this process, ensuring that your Oregon Charitable Remainder Unitrust complies with all pertinent laws and requirements.
The 5% rule for a charitable remainder trust, including the Oregon Charitable Remainder Unitrust, refers to the requirement that the payout must be at least 5% of the trust’s asset value. This rule ensures that the trust remains financially viable while providing benefits to both you and your chosen charities. Familiarizing yourself with these requirements is essential to maintaining compliance and optimizing your financial strategy.