Income beneficiaries may be interested in receiving an annuity amount rather than income from a unitrust. There are a number of reasons a beneficiary might consider such an arrangement. The downturn in the economy may be reducing the payout the beneficiary is receiving. A change in the beneficiary’s financial situation may prompt them to look for a more secure income stream. By releasing the beneficiary’s interest in the CRUT, the charity receives the trust principal sooner.
The IRS has permitted a donor to terminate his interest in a CRUT. In exchange, the Service permitted the donor to substitute the income from the CRUT for a charitable gift annuity issued by the charity that was the recipient of the remainder interest in the CRUT. The donor was entitled to a deduction for the difference between the value of the CRUT income interest and the value of the income interest in the annuity. PLR 200152018.