What are the types of charitable remainder trusts?
Charitable Remainder Unitrust (CRUT) A CRUT pays income to individuals based on a set percentage that is multiplied by the market value of the trust principal as revalued on January 1 of each year. As the principal value changes due to the investment, so does the payment. For example, if the trust is valued at $100,000 on January 1 and the payout percentage is 6%, the beneficiary would receive $6,000 for the year. If the trust had net earnings of $8,000 during the year, then the extra $2,000 of earnings would be added to the principal. The next year, the payment would be based on 6% times $102,000. Because the trust is revalued each year, additional contributions to CRUTs are allowed. Other CRUT options are available. Charitable Remainder Annuity Trust (CRAT) A CRAT pays a fixed income based on a set percentage that is multiplied by the value of the gift going into the trust. The payment remains the same for the duration of the trust, regardless of the investment returns. Because it ma
