I had to look it up, too. Interesting stuff. I found these links useful for understanding them:
https://www.bogleheads.org/forum/viewtopic.php?t=152611 (See esp. the last post.)
https://www.nerdwallet.com/blog/finance/crut-tax-shelters-explained-mitt-romneys-charitable-remainder-unitrust-shouldnt-controversial/It's possible this wouldn't make much sense for most FIRE folks. The IRS rate is low, and the demographic skews toward retiring young. That means your charitable contribution remainder calculation is going to be small. Since the setup costs are going to be significant, you need the tax benefits to offset.
Here's an online calculator that I tried this out with. It came up with a deduction of 0% for my wife's age and mine even with a minimum 5% payout:
http://www.legacy.vg/middlebury/articles/78.htmlIf you're 39, then you'll be able to deduct about 10% of your gift in the year that you make it. So maybe if you're a 39+ high earner in a high-tax state, you dump half a million in one and deduct 50k right before FIRE, creating a $50k tax deduction worth $25k to you? Then the income the trust pays out to you comes in the least favorable possible order. That will eat into the benefits. And you file an extra tax return for your trust every year until one of you is dead.
I'm pretty hardcore about tax avoidance, but that story just doesn't seem very favorable to me.
At age 55 you get a 22% deduction. Better, but still kind of 'meh.'