Net Income Make-up Charitable Remainder Unitrusts (NIMCRUTS)
Definition of "Net income make-up charitable remainder unitrusts (NIMCRUTS)"
Type of charitable remainder trust (CRT) that pays interest income for life or for a specified term to a non charitable beneficiary. The remainder of the interest is received by a charity. This trust pays a specified percentage of its fair market value with the beneficiary receiving only the interest and dividends earned by the trust for the current year. The trust does not pay out any unrealized income. If this payout of interest and dividends is less than the specified percentage as stated in the trust documents, the shortage is accumulated and paid to the beneficiary at some future date (the net income make-up provision goes into effect). For example, assume that the trust earns 6% in interest and 16% in unrealized capital gains during the current year. The beneficiary receives only the 6% earned interest with the 16% in unrealized capital gains being accumulated for distribution to the beneficiary at a future date when the recognized income in the trust is sufficient to affect the payout. In those situations where the trust has no income from interest and dividends, the shortage owed to the beneficiary is accumulated for future distribution to that beneficiary.
Popular Insurance Terms
Marketing of insurance through independent agents; also called independent agency system. Independent agents usually represent several insurance companies and try to insure the risk ...
Search engine site that emphasizes the fields of environmental risk management, environmental engineering, environmental planning, physical and biological sciences, and various ...
Method of funding a pension plan under which a single premium payment is made to fund a single unit of benefit for one year of recognized service with the employer. For example, if the ...
In automobile insurance, coverage providing protection in the event of physical damage to the insured's own automobile (other than that covered under comprehensive insurance) resulting from ...
Liability reserve required to be maintained by the national association of insurance commissioners (naic) prior to 1992 for fluctuations in the values of investments in securities. Realized ...
Means of paying the cost of benefits of pension plan participants including retirement, death, and disability. ...
Law that stipulates the minimum reserve the life insurance company must maintain for its life insurance policies and annuity contracts. This law was first developed by the NAIC as a method ...
Insurance established under the federal Railroad Retirement Act for railroad employees, covering death, retirement, disability, and unemployment. Benefits are adjusted for cost of living ...
Two basic kinds of policies sold by health insurance companies: medigap insurance (medicare supplementary insurance); and medicare wraparound ...
Have a question or comment?
We're here to help.