Which trust pays a fixed annual percentage payout but a variable dollar amount as the assets are revalued each year?

Which trust pays a fixed annual percentage payout but a variable dollar amount as the assets are revalued each year?

• A. Income-producing assets
• B. Charitable remainder unitrust
• C. Indicia of ownership
• D. Retained interest

Answer: (B)

In a charitable remainder unitrust, the income beneficiary receives a fixed percentage of the trust’s value each year, and the dollar amount changes because the trust assets are revalued annually. When the asset value goes up, the payment increases; when it goes down, the payment decreases. This setup contrasts with a charitable remainder annuity trust, which pays a fixed dollar amount each year regardless of asset value. The other terms aren’t about a payout that stays a constant percentage of a changing asset base.

In a charitable remainder unitrust, the income beneficiary receives a fixed percentage of the trust’s value each year, and the dollar amount changes because the trust assets are revalued annually. When the asset value goes up, the payment increases; when it goes down, the payment decreases. This setup contrasts with a charitable remainder annuity trust, which pays a fixed dollar amount each year regardless of asset value. The other terms aren’t about a payout that stays a constant percentage of a changing asset base.