Better Than A Pension Plan:
          
          
               There is also a popular variation of the unitrust
          usually called an "income only unitrust," which can
          defer payment until a later date, thereby supplementing
          or substituting for a pension plan.  This type of CRT
          has become a very popular method of constructing a
          favorable tax retirement income fund.
               As we have seen, the law requires distribution to
          beneficiaries of an amount equal to at least 5 percent
          of the trust assets each year, and in a typical
          unitrust the beneficiary must receive the annual
          payment, even if principal has to be invaded to make
          that payment.  But this requirement can be waived if
          the trust declaration includes a direction that
          payments are to be made from trust "income only."
               With careful planning and administration, the cash
          proceeds from the sale of original appreciated trust
          property can be reinvested in valuable assets producing
          little or no income in the early years of the trust
          operation, even as they increase in total value because
          of tax-free compounding.
               Years later, when the beneficiary desires income
          for retirement, these low-yield trust assets can be
          sold, and funds shifted to high-yield investments
          paying the beneficiary the lesser of the fixed
          percentage of the value of trust assets, or from trust
          income which exceeds this percentage, for as long as he
          or she lives.
               There can and should also be a "make up" provision
          in the trust declaration, requiring that whenever the
          specified percentage is not paid in any year because of
          the "income only" limitation forbidding invasion of
          principal, the cumulative deficit owed will be made up
          by increased payments in the subsequent years in which
          trust income does exceed the specified percentage of
          value. 
               Unlike 401K, Keogh, IRAs or other retirement
          plans, there is no limit to the amount one can
          contribute to a "net income" CRT, and some
          donor/beneficiaries continue to contribute on a monthly
          or other periodic basis until they need payback.