Skip to Main Content
GiftLaw Pro
Charitable Giving & Tax Information Service
Back to Gift Planning Website
GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.11 Unitrust Applications  >  3.11.1 Education Unitrust  >  Basic Quiz

Basic Quiz - 3.11.1 Education Unitrust

1. A charitable remainder unitrust can be used to provide a college education for children, grandchildren or other family members.
           
2. An education unitrust typically lasts for the lifetime of the child.
           
3. A donor who creates an education unitrust will receive a charitable income tax deduction equal to the present value of the income interest going to the children.
           
4. Because the donor is creating a trust for the benefit of another person, the capital gains will not be bypassed and, unfortunately, will be fully recognized by the donor upon transfer.
           
5. The income payout from the education unitrust will be taxed to the donor under the assignment of income doctrine.
           
6. The Kiddie Tax applies to children up to the age of 16 (21 for students).
           
7. An education unitrust will never be subject to gift taxes because charity is the remainder recipient.
           
8. A donor may apply his or her gift tax annual exclusion to an education unitrust, assuming that the donor did not retain the testamentary power of revocation.
           
9. If the trustee of an education unitrust has the discretion to allocate income among children, then the initial gift tax annual exclusion is lost.
           
10. With a term of years education unitrust, it is possible for the donor to retain the testamentary right of revocation.