CRUT Class of Beneficiaries

CRUT Class of Beneficiaries

Forum topic posted in Forum on 5 August 2008| 5 comments
audience: | last updated: 5 August 2008
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CAnselmo's picture
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Joined: 05/04/2008
Points: 105
Can you have a current and concurrent class of beneficiaries other than for two lives. Ex, Donor want to leave a CRUT with a 20% yearly stipend to be shared among her surviving sibilings as long as they live. Five siblings, each get 4%, if one dies, then the other 4 then get 5% and so on until the last one dies.?

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CAnselmo's picture
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Joined: 05/04/2008
Points: 105
The 20% was an arbitrary
The 20% was an arbitrary number so as to be easily divisible by 4 for the sake of the question. All of the intended beneficiaries are at least 70 years old. Christopher A. Anselmo Attorney & CPA Anselmo & Company, LLC 4161 Ridge Road Cleveland, OH 44144 (216) 485-1040 Chris@Anselmo.com
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Joined: 11/11/2004
Points: 15
CRT
Perhaps the term of years could be structured to assure the desired 20 percent payout and meet the requirements related to the present value of the remainder interest.
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Joined: 05/19/2006
Points: 45
Consider Using Trust as Non-Charitable Bene-No More Than 20 Yrs
I would advise you to consider having a trust for the benefit of the five siblings (or the survivors) named as the non-charitable beneficiary and to have the CRUT term approximate the youngest sibling's actuarial life (not to exceed 20 years). Based on the current most-favorable 7520 rate available (which I understand is 4.2%, I believe the maximum unitrust you could get on a 20-year term would be 11.158%; on a 15-year term would be 14.6%; on a 10-year term would be 21.101%. Given that it is a testamentary trust, you will want to consider drafting a formula clause that will establish the unitrust value such that it takes advantage of the most-favorable 7520 rate (as of the date of death) and comply with the that the noncharitable percentage is at least 5% of the annual value of the trust assets and that the charitable interest is at least 10% of the value of the trust at its inception. You should check to see if a formula clause is acceptable -- I haven't done any research on the permissibility of such a drafting technique with respect to CRUTs.
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Joined: 04/12/1999
Points: 30
The present value of the
The present value of the remainder has to be at least ten percent. With the 20 pct. payout and the multiple lives, this seems unlikely. Maybe a lower payout and a 20 year term of years. Russell A. Willis III, J.D., LL.M. 2414 NE 14th Ave Unit B, Portland, OR 97212 314.566.3386, rawillis3@juno.com Charitable Planned Gift Design Services https://www.charitableplanning.com
CAnselmo's picture
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Joined: 05/04/2008
Points: 105
CRUT Class of Beneficiaries
BTW the CRUT would be funded at the death of the donor, not trying to maximize charitable income tax deduction. Christopher A. Anselmo Attorney & CPA Anselmo & Company, LLC 4161 Ridge Road Cleveland, OH 44144 (216) 485-1040 Chris@Anselmo.com
7520 Rates: October 2.2% September 2.4% August 2.4%

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