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The Retirement Unitrust

The Retirement Unitrust
Francie grew up on a large family estate just outside the city. When her parents passed away, she inherited the land.

When Francie was growing up, the land was out in the country. Now that the city has grown, the land is within the city limits. Several developers would like to build homes on it.

Francie: We have received modest payments from the land over the years. I allowed a neighboring farmer to graze his cows there until recently. Since I inherited the land from my parents several years ago, the value has greatly increased.

Steve: We checked with our tax advisor and the land could be sold, but there would be a very large tax to pay. Since it is a good time to sell the land, we would like to let the sale proceeds grow for about 10 years until we plan to retire. In fact, we are hopeful that we can sell tax free and then allow the proceeds to grow tax free as well.

Francie: I was excited to learn from our tax advisor that there is a plan that does provide for our retirement. She explained that we could transfer the land into a special trust. Once inside this trust, the land could be sold tax free and the cash invested for growth. The proceeds would grow tax free inside the trust until we retire. At that time, the payouts would be taxable, but we could have as much as $900,000 in the trust.

Steve: We already have an IRA and are planning to use that for retirement. With the extra income from this retirement trust, we will be able to travel and really enjoy our golden years.

Francie: Best of all, the assets remaining in the trust when Steve and I no longer are living will be used by our local Jewish Community Foundation to establish a Perpetual Annual Campaign Endowment (PACE) fund in our names to support our Jewish Federation's Annual Campaign. We cannot know what the future will bring, but we trust the Federation to identify and focus on the most pressing needs in our community, in Israel and around the world. We can live forever through the good works that the Federation supports.

*Please note: The names and image above are representative of typical donors and may or may not be actual donors to The Jewish Federations of North America, a Jewish Federation or a Jewish Community Foundation. Since your unitrust benefits under federal rules may be different from this couple, you may want to click here to view a color example of your benefits.

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Any tax consequences described on this page are based on U.S. federal tax law. Charitable deductions from state and local taxes or from Canadian and provincial taxes may not be available to the same extent as from U.S. federal taxes. The Jewish Federations of North America (JFNA) does not provide legal advice. Donors are encouraged to seek independent tax and legal counsel. You may read JFNA's charitable solicitation disclosure statement here and important information about endowment gifts and bequests to JFNA here.