Trustees May Not Unilaterally Modify Trust To Qualify as Charitable Remainder Annuity Trust
Document required “annuity” payment of the greater of all net income or $50,000 a year to income beneficiaries
The Tax Court has upheld an IRS ruling denying a charitable estate tax deduction for the value of the remainder interest of an attempted charitable remainder annuity trust when the stated annuity payment did not meet the statutory requirements for a CRAT. It has held that the trustees had no unilateral power to amend the instrument and had failed to obtain a necessary court reformation.
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