The purpose of estate tax planning is to maximize the assets you pass on to future generations by minimizing gift and estate taxes. Estate-tax strategies revolve around the use of irrevocable trusts. This article discusses the most common types of irrevocable trusts that are used to minimize gift and estate […]
A unitrust is a type of trust that allows the beneficiary to receive a fixed percentage of the trust’s corpus or value each year. The unitrust amount is the fixed percentage the beneficiary will receive each year, regardless of how the investments perform. Understanding this term is essential for planning and budgeting purposes.
For example, if a trust has an annual unitrust amount of 5%, the beneficiary will receive 5% of the trust’s value each year. This type of trust may help plan for future expenses, allowing for a predictable income stream.
The unitrust amount determines how much money from the assets in the trust the beneficiary will receive each year. This amount can be significant for estates or trusts that are larger and have a lot of money invested in them.
To know the unitrust amount, divide the annual distribution by the initial principal. This number will give you the percentage of the principal that the trust will pay out each year.
Knowing the unitrust amount when setting up a trust is essential, as this will help you plan for the future. Find out more about your unitrust with our Charitable Remainder Trust calculator.
Read more of the definitions our team at Valur prepared for you.
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