Source: http://www.pgdc.com/pgdc/story/sample-testamentary-crut-declaration-one-measuring-life
Timestamp: 2017-12-11 11:51:15
Document Index: 141757449

Matched Legal Cases: ['§ 664', '§ 1', '§ 1', '§ 1', '§ 7520', '§ 4941', '§ 4947', '§ 4945', '§ 4947', '§ 170', '§ 170', '§ 170', '§ 170', '§ 170', '§ 170', '§ 170', '§ 643', '§ 643', '§ 643']

Sample Testamentary CRUT Declaration for One Measuring Life | Planned Giving Design Center
Rev. Proc. 2005-56; 2005-34 IRB 383
(a) an inter vivos CRUT providing for unitrust payments for one measuring life (see Rev. Proc. 2005-52), superseding Rev. Proc. 89-20, 1989-1 C.B. 841, and section 4 of Rev. Proc. 90-31, 1990-1 C.B. 539);
SECTION 4. SAMPLE TESTAMENTARY CHARITABLE REMAINDER UNITRUST -- ONE LIFE
I give, devise, and bequeath [ property bequeathed ] to my Trustee in trust to be administered under this provision. I intend this bequest to establish a charitable remainder unitrust, within the meaning of Rev. Proc. 2005-56 and § 664(d)(2) of the Internal Revenue Code (hereinafter "the Code"). The trust shall be known as the ___ Charitable Remainder Unitrust and I hereby designate ___ as the initial trustee (hereinafter "the Trustee").
1. Payment of Unitrust Amount. In each taxable year of the trust during the unitrust period, the Trustee shall pay to [ permissible recipient ] (hereinafter "the Recipient") a unitrust amount equal to [ a number no less than 5 and no more than 50 ] percent of the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter "the valuation date"). The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Recipient's death. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in the case of an undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
SECTION 5. ANNOTATIONS REGARDING SAMPLE TESTAMENTARY CHARITABLE REMAINDER UNITRUST -- ONE LIFE
(4) Payment of unitrust amount in installments. Paragraph 1, Payment of Unitrust Amount, of the sample trust specifies that the unitrust amount is to be paid in equal quarterly installments at the end of each quarter. However, the trust instrument may specify that the unitrust amount is to be paid to the recipient annually or in equal or unequal installments throughout the year. See § 1.664-3(a)(1)(i). The amount of the charitable deduction will be affected by the frequency of payment, by whether the installments are equal or unequal, and by whether each installment is payable at the beginning or end of the period. See § 1.664-3(c) and § 1.664-4.
(1) Minimum value of remainder. As noted in section 5.02(3) of this revenue procedure, the value of the charitable remainder interest (determined under § 7520) is required to be at least 10 percent of the net fair market value of the property contributed to the trust as finally determined for federal estate tax purposes. Section 664(d)(2)(D).
(1) Payment of the unitrust amount. Payment of the unitrust amount to the recipient is not considered an act of self- dealing within the meaning of § 4941(d), as modified by § 4947(a)(2)(A), or a taxable expenditure within the meaning of § 4945(d), as modified by § 4947(a)(2)(A). Section 53.4947-1(c)(2) of the Foundation and Similar Excise Taxes Regulations.
SECTION 6. ALTERNATE PROVISIONS FOR SAMPLE TESTAMENTARY CHARITABLE REMAINDER UNITRUST -- ONE LIFE
Payment of Unitrust Amount. The unitrust amount is equal to [ a number no less than 5 and no more than 50 ] percent of the net fair market value of the assets of the trust valued as of the first day of each taxable year of the trust (hereinafter "the valuation date"). In each taxable year of the trust during the unitrust period, the Trustee shall pay [ the percentage of the unitrust amount payable to the noncharitable recipient ] percent of the unitrust amount to [ permissible recipient ] (hereinafter "the Recipient") and [ the percentage of the unitrust amount payable to the charitable recipient ] percent of the unitrust amount to [ an organization described in §§ 170(c) and 2055(a) of the Code ] (hereinafter "the Charitable Recipient"). The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Recipient's death. If the Charitable Recipient is not an organization described in §§ 170(c) and 2055(a) of the Code at the time when any unitrust payment is to be distributed to it, then the Trustee shall distribute that unitrust payment to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee's sole discretion. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income and, to the extent income is not sufficient, from principal. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal. If, for any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient and the Charitable Recipient (in the case of an undervaluation) or receive from the Recipient and the Charitable Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Recipient's death or, if earlier, the date on which occurs the [ qualified contingency ].
(1) Explanation. As an alternative to prorating the unitrust amount in the taxable year of the recipient's death, the obligation to pay the unitrust amount may terminate with the last regular payment preceding the recipient's death. However, the fact that the recipient may not receive a final prorated payment shall not be taken into account for purposes of determining the present value of the remainder interest. Section 1.664-3(a)(5)(i). Note that although the obligation to pay the unitrust amount may terminate with the last regular payment preceding the recipient's death, the trustee must pay to the recipient's estate any amounts allocated to the payments payable before the recipient's death that are due as a result of an adjustment to the unitrust amount payable for that year, as in the case of an undervaluation.
Distribution to Charity. At the termination of the unitrust period, the Trustee shall distribute all of the then principal and income of the trust (other than any amount due the Recipient under the terms of this trust) to one or more charitable organizations described in §§ 170(c) and 2055(a) of the Code as the Recipient shall appoint and direct by specific reference to this power of appointment by inter vivos or testamentary instrument. To the extent the Recipient fails to effectively exercise the power of appointment, the principal and income not effectively appointed shall be distributed to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee's sole discretion. If an organization fails to qualify as an organization described in §§ 170(c) and 2055(a) of the Code at the time when any principal or income of the trust is to be distributed to it, then the Trustee shall distribute the then principal and income to one or more organizations described in §§ 170(c) and 2055(a) of the Code as the Trustee shall select, and in the proportions as the Trustee shall decide, in the Trustee's sole discretion.
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [ permissible recipient ] (hereinafter "the Recipient") a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [ a number no less than 5 and no more than 50 ] percent of the net fair market value of the assets of the trust valued as of the valuation date (hereinafter "the fixed percentage amount described in (a) of paragraph 1") or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. The valuation date is the first day of each taxable year of the trust. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Recipient's death. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
In each taxable year of the trust during the unitrust period, the Trustee shall pay to [ permissible recipient ] (hereinafter "the Recipient") a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [ a number no less than 5 and no more than 50 ] percent of the net fair market value of the assets of the trust valued as of the valuation date (hereinafter "the fixed percentage amount described in (a) of paragraph 1") or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. The unitrust amount for a taxable year shall also include any amount of trust income for the year that is in excess of [ the fixed percentage amount determined under (a) of this paragraph for the year ], but only to the extent that the aggregate of the amounts paid to the Recipient in prior years was less than the aggregate of the amounts determined for all prior years under (a) of this paragraph. The valuation date is the first day of each taxable year of the trust. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Recipient's death. The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(iii) In general. The first day of the unitrust period shall be the date of my death and the last day of the unitrust period shall be the date of the Recipient's death. The valuation date is the first day of each taxable year of the trust. If, for any year, the net fair market value of the trust assets is incorrectly determined, then within a reasonable period after the correct value is finally determined, the Trustee shall pay to the Recipient (in the case of an undervaluation) or receive from the Recipient (in the case of an overvaluation) an amount equal to the difference between the unitrust amount(s) properly payable and the unitrust amount(s) actually paid.
. In each taxable year of the trust during the unitrust period, the Trustee shall pay to [ permissible recipient ] (hereinafter "the Recipient") a unitrust amount equal to the lesser of (a) a fixed percentage amount equal to [ a number no less than 5 and no more than 50 ] percent of the net fairmarket value of the assets of the trust valued as of the valuation date (hereinafter "the fixed percentage amount described in (a) of paragraph 1(i)") or (b) the trust income for the taxable year as defined in § 643(b) of the Code and the applicable regulations. The unitrust amount for a taxable year shall also include any amount of trust income for the year that is in excess of [ the fixed percentage amount determined under (a) of paragraph 1(i) for the year ], but only to the extent that the aggregate of the amounts paid to the Recipient in prior years was less than the aggregate of the amounts determined for all prior years under (a) of paragraph 1(i). The unitrust amount shall be paid in equal quarterly installments at the end of each calendar quarter from income. Any income of the trust for a taxable year in excess of the unitrust amount shall be added to principal.
(i) Proration in years preceding the effective date of triggering event.
For a short taxable year before the effective date of the triggering event, which may include the taxable year during which the unitrust period ends, the Trustee shall prorate on a daily basis the fixed percentage amount described in (a) of paragraph 1(i). In such a year, this prorated fixed percentage amount shall be used in place of the fixed percentage amount described in (a) of paragraph 1(i) to determine the unitrust amount payable for that year.