Charitable organizations MAY HOLD contingent remainder interests. No interest in such a trust may be acquired through purchase. Each current and contingent beneficiary is counted toward the limit of 75 shareholders in an S corp. The 1996 tax law also added these trusts to the list of eligible S corporation shareholders, but the change didn't take place until tax years beginning after 1997. Thus an S corp can contribute its own stock to its retirement plan and get a full deduction without a cash outlay.
Trusts are basic estate planning tools.
S corporation owners need to be able to use trusts, but they must proceed with caution. This information is NOT meant to be taken as Legal advice. I am NOT an attorney and this is NOT be mistaken for giving legal advice. I am merely providing information that has been provided to me from several legal sources and adding my own comments to that information for a better understanding.