Unitrusts

Like the annuity trust, the unitrust provides for a gift which returns an income. But unlike the annuity trust, the income from a unitrust rises or falls with the value of the assets placed in the trust.

You determine the percentage of payout when the gift is made. Each year this percentage of the value of the trust assets is paid to you or others you select. When the value of the trust investments goes higher, more income is received. The income will be less if the value of the assets declines.

Additions can also be made to this trust, and a tax deduction is allowed for a portion of each amount contributed. For many taxpayers, deductions for Individual Retirement Accounts (IRAs) and other plans are now limited, so the unitrust could play a big role in planning for retirement years.