The Highs and Lows of Rising Interest Rates

may be allocated to income under the terms of the governing instrument, if not prohibited by local law. In addition, the trustee may be given discretionary power to make the allocation, provided the applicable state statute permits the trustee to make adjustments between income and principal to treat beneficiaries impartially. A “flip” CRUT can change from an income-only CRUT to a regular CRUT on a one-time basis. The annotations state that the change may not be discretionary with or in the control of the trustees or any other person.