Net Income Only Charitable Remainder Unitrust (NI-CRUT)
A net income charitable remainder unitrust (NI-CRUT) is one variation of a standard CRUT. A NI-CRUT pays out income to the income beneficiary only when it produces income. Specifically, the trustee has the option to 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 (e.g., dividends and/or interest). If the annual income earned by the trust is more than the specified percentage, the excess is added to the trust assets for next year's valuation. If the annual income earned by the trust is less than the specified percentage, the difference between these two cannot be paid out. It is permanently lost for payout purposes. Finally, if the trust earns no income in a given year, no payment can be made to the income beneficiary in that year.