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§ 17.6 CHARITABLE SPLIT-DOLLAR INSURANCE PLANSIt would be intended that a person be considered as an indirect beneficiaryunder a contract if, for example, the person receives or will receive any economicbenefit as a result of amounts paid under or with respect to the contract.For this purpose, the term charitable organization means the same as in thefederal income tax charitable deduction setting. 52 Thus, it includes charities asthat term is used in the tax exemption context, 53 but also encompasses entitiessuch as veterans’ organizations and certain fraternal groups. 54Charitable Gift Annuities. In the case of a charitable gift annuity, 55 if the charitableorganization purchases an annuity contract issued by an insurance companyto fund its obligation to pay the gift annuity—a practice known asreinsurance—a person receiving payments under the annuity arrangement is nottreated as an indirect beneficiary as long as:• the charity possesses all of the incidents of ownership under the annuitycontract purchased by the charity,• the charity is entitled to all the payments under the contract, and• the timing and amount of payments under the contract are substantiallythe same as the timing and amount of payments to each person pursuantto the organization’s obligation under the charitable gift annuity (as ineffect at the time of the transfer to the charity). 56A charitable gift annuity obligation may be issued under the laws of a statethat requires each beneficiary under the gift annuity to be named as a beneficiaryunder an annuity contract issued by an insurance company authorized totransact business in that state, in order for the charitable gift annuity to beexempt from insurance regulation by that state. In this situation, the foregoingfirst two requirements are deemed met as long as:• the state law requirement was in effect on February 8, 1999 (see below),• each beneficiary under the charitable gift annuity was a bona fide residentof the state at the time the charitable gift annuity was issued, and• the only persons entitled to payments under the charitable gift annuitycontract are persons entitled to payments as beneficiaries under the obligationon the date the obligation is entered into. 57Charitable Remainder Trusts. If a charitable remainder trust 58 holds a lifeinsurance, endowment, or annuity contract issued by an insurance company, aperson is not to be treated as an indirect beneficiary under the contract held bythe trust solely by reason of being a recipient of income paid by the trust, as longas the trust possesses all of the incidents of ownership under the contract and is52 IRC § 170(c).53 IRC § 501(c)(3).54 See § 3.3.55 See Chapter 14.56 IRC § 170(f)(10)(D).57 IRC § 170(f)(10)(G).58 See Chapter 12. 541