The trust principal is accessed if the investment earnings do not meet the distribution requirements. At the death of the beneficiaries or at the end of a term of up to 20 years, the remainder interest is paid to or held for the benefit of a qualified charitable organization. Additional contributions to the trust are allowed at any time. Income may keep better pace with inflation. The beneficiary receives a steady stream of income.
Financial security is provided to help maintain the beneficiaries' current standard of living.
The donor receives significant tax benefits via charitable deductions both when the trust is funded and each year as the assets grow tax-deferred. As it is a form of a CRUT, the assets of the trust are valued annually creating a variable income payment made at least annually to one or more persons who are living at the time of the creation of the trust. However, the trust can only make income distributions to the extent that income is earned and the principal can never be accessed for distribution. At the death of the beneficiaries or at the end of a term of up to 20 years, the remainder interest is paid to or held for the benefit of a qualified charitable organization. The income distribution can increase based on the annual valuation.