Frequently Asked Questions

  1. What is a Charitable Remainder Unitrust?
  2. What Formats are available for Charitable Remainder Unitrusts?
  3. What are some possible, personal financial benefits for creating a Charitable Remainder Trust?
  4. Who are the Candidates for a Charitable Remainder Trust?
  5. How is the income tax charitable deduction calculated for a gift to a Charitable Remainder Trust?
  6. What are the gift and estate tax consequences of retaining an income interest in a Charitable Remainder Trust?
  7. What tax and information returns are required after a Charitable Remainder Trust is created?
  8. What are the Annual Valuation Rules for Charitable Remainder Unitrusts? and Why are the Annual Valuation Rules Important?
  9. What is a Charitable Remainder Annuity Trust?
  10. What Factors Should I Consider When Choosing a Payout Format for my Charitable Remainder Trust?
  11. How do I select a measuring term for my Charitable Remainder Trust?
  12. What are some methods of income deferral within a Flip Charitable Remainder Unitrust (Flip-CRUT) or a Net Income with Makeup Charitable Remainder Unitrust (NIMCRUT)?
  13. What is a Flip Charitable Remainder Unitrust (Flip-CRUT)?
  14. What are the Typical Responsibilities of a Trustee of a Charitable Remainder Trust?

  15. What is an “Independent” Special Trustee (IST)? When is an IST used in Charitable Remainder Trust Planning?

    An Independent "Special" Trustee is a trustee that is granted exclusive specialized fiduciary powers. Within the context of application to a charitable remainder trust, the "special" trustee is given sole discretion regarding:

    • valuation of hard-to-value assets
    • the disposition of contributed assets, and
    • sprinkling of income among income recipients

    While the Trustor often retains the right to appoint, remove and/or replace the Independent Special Trustee, the Trustor cannot exercise any of the powers of the special trustee.

    Application of Independent "Special" Trustee

    The use of carefully drafted independent "special" trustee provisions within a charitable remainder trust that also enables the Trustor to serve as "primary" trustee should insulate the Trustor from grantor trust problems provided state law permits the use of such rights. Therefore, state law regarding the availability of the "special" trustee provision should be thoroughly researched.

    In Revenue Ruling 95-58, the IRS concluded that a Trustor’s reserved right to dismiss a trustee and replace it with another independent trustee will neither disqualify the trust nor create a grantor trust problem so long as the replacement trustee is also required to be "independent" as that term is defined for grantor trust purposes in §672(c).

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