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Part 44

Thomas M. Boles, 33, G.C.
Director of Development
La Habra, California

A “FLIP” unitrust can enhance your charitable giving.


Hi folks! The Scottish Rite Foundation “store” is now open for another year with great products and the latest generation of ideas for increasing your income, reducing your taxes, and providing you with a secure financial future. I must admit, as times goes on and our legal and accounting communities generate new ideas, it gets tougher and tougher for a “storekeeper” like me.

However, this month I would like to introduce you to a new type of unitrust. This was brought to my attention as a result of a conference of the National Committee on Planned Giving meeting in New Orleans. Frances Schafer of the IRS was asking whether or not trustees should consider “FLIP” unitrusts. What is a “FLIP” unitrust, anyway?

First of all, it is very complicated, and I have to admit that I have lost a few hours sleep over it. But briefly, a “FLIP” unitrust allows one to place land or corporate securities into a charitable remainder trust, pay out only the net income until the property is sold, and then “flip” or change the trust from a new income only to a straight unitrust the following January 1.

I have to say that the “FLIP” isn’t for everyone, but it certainly seems to answer a lot of questions when real property and marketable securities are involved. But I do have good news for you! With my dandy new 1998 Crescendo Program, I can develop optional language in a unitrust document that will calculate the complicated payout options. It includes 1) straight unitrust 2) net income plus make-up unitrust 3) income-only unitrust and 4) FLIP unitrust.

This new computer program permits me to extend my spreadsheet on principal and income amounts out to 80 years while also enabling me to view the 1998 income tax brackets for a single person and a married couple, using the new $625,000 exemption and extending it to the year 2006.

My reason for sharing this is to remind you that, although we furnish information only for educational purposes and at no charge, the reports we provide are state of the art and are done quite well. Also, we can now furnish a detailed explanation for every trust analysis we prepare for presentation to a donor’s legal counsel and/or tax advisor. This report includes: 1) a complete and detailed flow chart 2) deduction worksheets 3) annuity breakdown 4) income taxation worksheets 5) graphics analyzer 6) spousal IRA/Unitrust 7) partial IRA to testamentary unitrust 8) bequest of IRA and 9) answers to your most often asked questions.

Don’t hesitate to contact me. The Scottish Rite “store” is open seven days a week 24 hours a day, and we are here to help you. Write or phone, and I’ll assist you plan your financial future. May it be filled with good health, prosperity, and happiness. Which leaves my “ad” for the month to read:

It is written “The old year dies and the new is born, I have laid the foundation, and another builded thereon.”

Please Note: This information is distributed with the understanding that the author is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expertise is required, the services of a competent professional should be sought. From: A Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers.


To receive more information on the benefits of giving appreciated assets to the Scottish Rite Foundation, S.J., USA, print this web page, fill out the requested information, and mail to the address below:

For an investment of securities and/or real estate, please run a calculation and send it to me based on an investment of $__________. Assume the cost basis of the asset (what was originally paid, less depreciation) is $__________.

My birth date is _________________; My spouse’s is _________________.

Name ____________________________ Date _______________________

Address _______________________________________________________

City _________________________ State ________ Zip _______________

Send to: Scottish Rite Foundation, c/o Thomas M. Boles, 1761 East Woodcrest Avenue, La Habra, CA 90631-3260


Brethren Benefit From Pooled Income Fund
What is one of the better ways you can benefit yourself and your family and, at the same time, support the Scottish Rite and its Childhood Language Disorders Program? The answer is simple: The Scottish Rite Pooled Income Fund!

The Scottish Rite Pooled Income Fund allows you and, if you wish, your wife and/or other beneficiary(ies) to receive a worry-free lifetime income as well as attractive tax benefits by joining the Fund via a financial gift to The Scottish Rite Foundation, S.J., USA. For more information call, 1-800-486-3331 or fax 202-387-1843.

Grand Commander Kleinknecht will personally respond to your inquiry. If he is not available, please leave your name and number, and the Grand Commander will return your call at his earliest opportunity. Through the Scottish Rite Pooled Income Fund, you can do well for yourself and your family while also doing good for others!