3.10.7 Basic Quiz -- Unitrust Document Requirements

The only mandatory provision required in a charitable remainder unitrust is that a qualified exempt charity is the recipient of the remainder interest.

True False

The income beneficiary of a charitable remainder unitrust will receive a full year's unitrust payment on December 31st even if the trust is funded half-way through the year.

True False

If the named charitable remainder beneficiary of a charitable remainder unitrust no longer exists or loses its tax exempt status before the trust terminates, then the unitrust will be disqualified and the donor will lose his or her charitable income tax deduction.

True False

One advantage of a charitable remainder unitrust is that it is not deemed a private foundation and therefore is not subject to the rules applicable to private foundations.

True False

It is permissible to make "in-kind" distributions to charity from a charitable remainder trust.

True False

If a donor wishes to hold a testamentary power of revocation, it must be specifically included in the trust document.

True False

The trust document may contain a provision that allows a donor to make distributions of principal to charity prior to termination of the trust.

True False

If a charitable trust is properly drafted, gift and estate taxes may be paid from the charitable remainder trust assets.

True False

For testamentary charitable remainder unitrusts, Treasury regulations require that the funding of the trust relates back to the date of death.

True False

There are two types of unitrusts: straight payout unitrusts and net income plus makeup unitrusts.