Net Income with Makeup Charitable Remainder Unitrust (NIMCRUT)

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A net income with makeup charitable remainder unitrust (NIMCRUT) is one variation on the standard CRUT. A NIMCRUT pays out income to the income beneficiary only when it produces income. Specifically, the trustee can pay the income beneficiary the lesser of the specified percentage of trust assets or the actual income earned by the trust in a given year (i.e., dividends and/or interest). If the annual income earned by the trust is more than the specified percentage required to be paid, the excess is added to the trust assets. If the annual income earned by the trust is less than the specified percentage, the difference can be paid out in later years when the trust income exceeds the specified percentage. In this way, there is a makeup of the payment.

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