Bear Market Provides Boost to a Little-Known Strategy; a Record Low Hurdle Rate

By Mike Spector

Most investors choose annuity trusts, financial planners say, because the charitable payments are fixed. In a unitrust, as assets grow, the percentage going to charity gobbles up more and more money, leaving less for heirs.

When establishing either trust, the donor can opt to take an upfront income-tax deduction based on the trust's payments to charity. Many opt to forgo that deduction, though, because taking it requires that the donor pay taxes on the trust's investment gains.