3.10.3 Basic Quiz -- Unitrust Payouts

In some cases, a charitable remainder unitrust may be drafted with a payout percent of 50%.

True False

A charitable remainder unitrust must have a payout percent of at least 5% in order to be a qualified charitable remainder unitrust.

True False

A charitable remainder unitrust with three income beneficiaries each entitled to a 2% payout, thereby totaling 6%, will qualify as a charitable remainder unitrust.

True False

The 10% minimum deduction interest test requires that the remainder beneficiary (charity) receive at least 10% of the original trust value when the trust terminates.

True False

Although the selected payout percent has an effect on the charitable tax deduction, the age of the income beneficiary (or the selected term of years) has no effect.

True False

In the case of very young donors, it is possible that even with a 5% payout, the trust will not pass the 10% minimum deduction interest test.

True False

There is never a valid reason to select a lower unitrust payout percent when a higher payout percent can be chosen and still pass the 10% minimum deduction interest test.

True False

A charitable organization may be named as the income beneficiary of a charitable remainder unitrust.

True False

The minimum 5% payout requirement requires that at least 5% is paid to a non-charitable income beneficiary.

True False

The distribution amount from a charitable remainder unitrust can easily be predicted, since the unitrust percentage is stated in the trust document and cannot be changed.