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
Same as term Concurrency: in which at least two insurance policies provide identical coverage for the same risk. ...
Restoration of a policy that has lapsed because of nonpayment of premiums after the grace period has expired. In life insurance the reinstatement time period is three years from the premium ...
Means of providing insurance protection for the property of a business that is not at a fixed location. ...
Procedure for accumulating, conserving, and distributing personal wealth. In essence, estate planning focuses on enhancement of the value of an estate and its conservation. At the death of ...
Trust whereby asset management is provided until a child reaches the age of majority. Upon reaching majority, the child has full use and control over the assets. The grantor of the trust ...
Same as term Expiration: termination date of coverage as indicated on the insurance policy. ...
Effort to keep life insurance policies from lapsing. Many life insurance companies have conservation officers who contact lapsing policy owners explaining the benefits of keeping their ...
Futures contracts based on automobile and health reinsurance policies to be traded on the Commodity Future Exchange of the Chicago Board of Trade. The purpose is to allow insurance ...
Coverage for the inside of an insured premises of a business firm if it experiences a loss of money, securities, personal property, and damage or destruction of real or personal property ...
Have a question or comment?
We're here to help.