What does CRUT stand for?

If you have bullish prospects who are charitably inclined, look to the charitable remainder unitrust for a term of years.

The property was assembled as part of two transactions with the Vestal Family Charitable Remainder Unitrust, led by Frances Vestal, $576,000 in October 2006; and Frances Vestal, $216,000 in November 2007.

Those assets are now part of a charitable remainder unitrust, a popular estate planning tool.

This ruling-which applies if either a Charitable Remainder Annuity Trust or Charitable Remainder Unitrust names the SNT as beneficiary- represented quite a break from prior law which, among other things, required that a CRT's income be used for the trust beneficiary's support-a requirement that would have, in most cases, ended a beneficiary's eligibility for government benefits, such as Supplemental Security Income (SSI) and Medicaid.

There are many types of CRTS, a few of which include; A) charitable remainder annuity trust (CRAT) which pays a fixed dollar amount annually; B) charitable remainder unitrust which pays a fixed percentage of the trust's assets annually; C) charitable pooled income fund which is set up by the charity allowing many donors to contribute.

Conclusion The charitable remainder unitrust may be an appropriate estate planning tool for clients who own appreciated assets and are charitably inclined, but are not ready to part with the entire asset or its potential income.

There are many other estate planning options available which are beyond the scope of this article, such as charitable remainder trusts, charitable remainder unitrusts, pooled income fund trusts, charitable lead trusts, charitable lead unitrusts, and charitable annuities.

The distribution to the noncharitable beneficiary or beneficiaries can be paid out in the form of an annuity, in which case the CRT is known as a charitable remainder annuity trust (a CRAT), or in the form of a unitrust, in which case the CRT is known as a charitable remainder unitrust (a CRUT).