A Trust is a legal document containing a formal agreement between parties in which one party grants or vests the ownership rights (title) to one or more trustees for the purposes of conservation, protection, or preservation on behalf of the first party or beneficiary of the trust. This instrument normally and usually states: The reasons and purposes as to why the trust was established and the actions that will terminate the trust, a detailed record of what assets are placed and present in the trust, the authority and boundaries of the said trustees, the reporting requirements of the trustees, and other provisions associated to the trust. It may also state the compensation that the trustees will be receiving, if there are any.
A Charitable Remainder Trust is a trust which is able to generate a potential income stream for you, as the donor, or other beneficiaries such as a spouse. In simpler terms, It is a legal document which helps you make money and at the same time, helps you pay for living expenses. There are two types of charitable remainder trusts. First is the Charitable remainder annuity trusts or CRATs which distribute a fixed amount each year and state that no additional contributions are allowed. The second is the Charitable remainder unitrusts or CRUTs which distribute a fixed percentage and state that additional contributions are allowed. A charitable trust works in this way: It is a gift to charity, and outright gifts to charity have a reduced tax and can be reduced without limit. It is a way of earning a substantial amount at the same time funding for charities. Goodwill.
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The purpose for creating this trust is to promote ________________________________
I, ___________, trustor, create a trust fund of the property listed in Schedule A attached and incorporated by this reference, which I have delivered today to ____________.
I hereby give, transfer, and deliver the property described in Schedule A to the trustees in trust for the purposes stated.
The name of this trust shall be the _____________.
Trustor and Trustee, hereby agree as follows:
TRANSFER OF CORPUS
Trustor hereby gives and transfers to trustees the property described in the attached schedule together with its income and profits and any other sums that may be transferred to trustees or their successors pursuant to the terms of this agreement, to hold in trust for the uses and purposes set forth in this agreement.
INVESTMENT AND APPLICATION OF TRUST FUND AND INCOME
The trustees shall hold the trust fund and, in their discretion, invest it or parts of it in securities in which trustees are permitted to invest under applicable laws. The trustees from time to time in their own discretion may invest the income to the charitable uses and purposes described above solely by means of contributions to any charitable corporation, trust, community chest, fund, or foundation which at the time of the contribution by the trustees is one of those organizations described in the IRS Code of the United States, contributions to which are deductible for income tax purposes.
Trustees shall make distributions at such times and in a manner as not to subject the trust to tax and shall not act in any self-dealing as described in Section 4941 of the Internal Revenue Code. Trustees shall not retain any excess business holdings as defined in Section 4943 of the Internal Revenue Code and shall not make any investments as defined in Section 4944 of the Internal Revenue Code nor make any taxable expenditure, which would subject the trust or corporate trustee to tax under Section 4945 of the Internal Revenue Code.
RESTRICTIONS ON USE OF TRUST FUND
The trust fund and the income of the trust fund shall be used only for the purposes described above and shall not be used to benefit or inure any private person or corporation, except for the corporate trustee. No part of this trust shall be used for political purposes.
ADDITIONAL GIFTS TO FUND
Anyone from time to time may contribute to the trust corpus money or property to the trust, subject to the approval of the trustees.
The trustees shall not be responsible for any error or decision which is absent of bad faith.
The corporate trustee shall be reimbursed from time to time as decided by the trustor and be paid by the trust. All expenses incurred through the administration of the trust fund shall be paid by the Trustor. The individual trustees shall serve without compensation.
DECISIONS OF THE TRUST
Any action by the trustees must be in writing and signed by a majority of the trustees and shall be filed with the corporate trustee.
CONTROL OF FUNDS
The corporate trustee shall have exclusive custody of the securities, cash, and other property of the trust fund.
SUCESSION OF TRUSTEES
In the case of a death or resignation of one of the trustees, the successor shall be appointed by the remaining trustees. The remaining trustees shall have full power to act under this agreement until a new trustee is appointed.
Gifts made into the trust under this agreement shall be irrevocable. If it is determined that this trust is not tax exempt after making contributions or gifts in the manner and to the extent provided by the Internal Revenue Code, then such gifts as remain in the fund shall be given to a qualified tax exempt charitable organization selected by trustees to best carry out the purpose of this trust. This trust shall thereupon terminate.
This review list is provided to inform you about this document in question and assist you in its preparation. This is a standard charitable trust. Feel free to add or modify it as appropriate.
1. Make multiple copies. Give one to each signatory. Keep one in your home safe. Put one in your home safe.