The specific interest in a testamentary charitable remainder unitrust most often with donors who want to their retirement assets, such as IRA’s, to their children or other loved ones with the ability to still “stretch” the annual distribution over the life of the beneficiaries.
The IRS Specimen documents for a TCRAT were created assuming that the “funding source” of assets to fund the TCRAT will come from the donor’s last will or revocable living trust. Since most professionals recommend the funding source be an IRA via beneficiary designation, this technique would create a stand-alone or “dry” trust. Therefore our software drafts the TCRAT as a revocable trust during the life of the donor/grantor and becomes irrevocable at the donor’s passing.
Note that if you are trying to fund the TCRAT with the donor’s last will or revocable living trust, you can still set it up initially as a revocable trust, as we have done, assuming most of the TCRATs will be funded via beneficiary designation, however, if you are more comfortable setting up immediately as an irrevocable trust than you can substitute the langue in article 1 with the IRS Specimen language.
Rev. Proc. 2003-57. Testamentary charitable remainder annuity trust, one life
Rev. Proc. 2003-58: Testamentary Charitable Remainder Annuity Trust payments for a term of years
