Jeff Gonya, Chris Moran, and Allison Church published “Controlling Capital Gains Deferral with a ‘Spigot’ NIMCRUT” in the July edition of Bloomberg Law’s Estates, Gifts & Trusts Journal. The following is an excerpt:
Charitable remainder unitrusts (CRUTs) are commonly used to combine charitable giving objectives with financial and estate planning goals such as retirement planning, deferring capital gain income on the sale of highly appreciated assets, and diversifying an investment portfolio. Deferring capital gain is generally a positive feature of a CRUT. However, the potential for higher capital gains tax rates could make deferral unattractive. Combining a “net income” CRUT with a “make-up” provision and a wholly owned limited liability company provides the donor with flexibility and control for deferring income.