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
Observance of an event occurring on a repeated basis that leads one to believe that a certain probability is attached to the occurrence of that event. For example, if there are a red ball ...
Same as term Contingent Business Income Coverage Form: coverage for loss in the net earnings of a business if a supplier business, subcontractor, key customer, or manufacturer doing ...
Frequency with which employees resign, are fired, or retire from a company, usually computed as the percentage, of an organization's employees at the beginning of a calendar year. The ...
Policy under which a portion of the death benefit (generally 25%) becomes payable to the insured for a specified medical condition prior to death. The purpose of the accelerated death ...
Individual prohibited under the employee retirement income security act of 1974 (erisa) from conducting transactions with a trust plan. The prohibition is intended to prevent a conflict of ...
Hospital, physician, or other provider of health care that an insurer recommends to insureds. A PPO allows insurance companies to negotiate directly with hospitals and physicians for health ...
Latin phrase meaning "beyond power or authority" describing an act by a corporation that exceeds its legal powers. For example, corporations do not have the authority to engage in the ...
State law that stipulates the establishment of required reserves for claims made basis liability coverage contracts, removes the excess statutory reserves, and directs that all amounts that ...
To accumulate. For example, under one of the dividend options of a participating life insurance policy, dividends can accumulate at interest by leaving them with the insurance company; cash ...
Have a question or comment?
We're here to help.