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The IRS Says:
The Internal Revenue Code imposes strict
requirements on a CRT, including:
- an irrevocable transfer of property to the
trust, which must be reported by the donor and the
trust on IRS forms;
- payment by the trust of a certain percentage of
the value of the trust assets to one or more non-
charitable beneficiaries for a period measured by their
lifetimes, or up to a maximum of twenty years beyond
their lifetimes;
- minimal payments of at least 5 percent of the
value of the trust assets to the beneficiaries, a
percentage that once chosen, cannot be changed during
the life of the trust;
- the remaining trust principal must be
distributed to one or more qualified tax-exempt
charitable institutions when the trust terminates -
this being the key provision of a CRT.
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