Hospital Fund Seeks Reconsideration of CRAT, CRUT Safe Harbor for Surviving Spouses

Hospital Fund Seeks Reconsideration of CRAT, CRUT Safe Harbor for Surviving Spouses

News story posted in Revenue Procedures on 6 June 2005| comments
audience: National Publication | last updated: 18 May 2011
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Summary

Jeffrey Close of Glendale Memorial Hospital has urged Treasury to reconsider Rev. Proc. 2005-24 under which a surviving spouse's right of election to receive a statutory share of a grantor's estate would be disregarded when determining whether a charitable remainder annuity trust or charitable remainder unitrust satisfies section 664(d).
Full Text:

From:

Close, Jeffrey - GMHHC [Jeffrey.Close@CHW.EDU]

Sent: Tuesday, May 24, 2005 1:54 PM
To: 'Eric.Solomon@DO.TREAS.GOV';
'Mark.W.Everson@IRS.GOV';
'Donald.L.Korb@IRSCOUNSEL.TREAS.GOV';
'Heather.Maloy@IRSCOUNSEL.TREAS.GOV';
'Catherine.Hughes@DO.TREAS.GOV'
Subject: Revenue Procedure 2005-24

I am the Fund Development Officer at Glendale Memorial Hospital in California. Our hospital is a $ * * * /year operation with annual revenues in excess of expenses of between * * *%. Annual depreciation on facilities and equipment is approximately $ * * *. The financial situation of our hospital is not uncommon. The hospital's viability depends on philanthropic support: current giving, bequests, and gifts through charitable remainder trusts. In most years more than * * *% of our hospital's gift income is derived from bequests and CRTs.

Our hospital continuously solicits "planned gifts" from our donors. Our most major obstacle in securing these very important contributions rises from the community of professional advisors, unfamiliar with the relatively simple mechanics of creating these vehicle for helping our hospital, who encourage their client to take what they perceive as a path of less resistance, therefore discourage their clients from helping us.

One way I keep abreast of current professional affairs is through a monthly publication, "Taxwise Giving", that has reporting on Treasury and IRS's Rev. Proc 2005-24 that will require waivers of spousal rights of election against inter vivos CRUTs and CRATs. As you have probably heard by now, organizations such as our hospital strongly feel that implementation of this procedure will effect us in a very negative way -- even in a community property State such as California -- by creating an unnecessary and unworkable rule that will further discourage donors (and their advisors) from electing to create charitable trusts. I respectfully request, therefore, that you help persuade Treasury and the IRS to reconsider implementation of Revenue Procedure 2005-24.

Thank you very much for you attention and consideration.

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