"FlipCRUT"

Despite its odd name, a "FlipCRUT" is an exceptionally flexible type of unitrust, recognized by the IRS in 1998. FlipCRUTs are generally used for donating real estate or as a way to defer income for retirement.

Here's an example:

You would like to donate a vacation home no longer being used to a CRUT that pays you 6% a year. However, the CRUT is unable to start making the payments to you until the property is sold. This could take several months or even longer. This problem is easily resolved by establishing a FlipCRUT, wherein you stipulate that the "flip event" will be the sale of the property. Prior to the flip date, The English-Speaking Union pays you only the income earned which, in the case of non-income producing real estate, is zero. After the trust flips, you receive the full 6% of the trust's fair market value every year.

In the case of retirement planning, the trigger event may be set for your 65th birthday. Up until that time, the trustee invests the principal for maximum growth and little or no income. After the trigger event, the investment objective is changed to produce maximum income for you.

As is the case with all unitrusts, you may make additional contributions to your FlipCRUT as well. Regardless of when the trigger event occurs, you are entitled to an income tax charitable tax deduction in the year your gift is established.

Suggested Minimum: $100,000 (Cash or appreciated securities). Age: 60+.
Real estate: $250,000. Age: 60+