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CHARITABLE REMAINDER TRUSTSFor example, the governing instrument of a CRAT may provide that a portion ofthe trust assets may be distributed currently, or upon the death of one or moreof the income beneficiaries, to a charitable organization. 95(f) Period of Payment of AnnuityThe period for which an annuity amount is payable must begin with the firstyear of the CRAT and continue either:• for the life or lives of a named individual or individuals, or• for a term of years not to exceed 20 years. 96Only an individual or a charitable organization may receive an amount for thelife of an individual. If an individual receives an amount for life, it must besolely for his or her life. Payment of an annuity amount may terminate with theregular payment next preceding the termination of the annuity amount period.(The annuity amount period ceases upon the death of the income beneficiary(ies).)The fact that the income beneficiary may not receive the last paymentcannot be taken into account for purposes of determining the present value ofthe remainder interest. 97If an annuity amount is payable for a term of years, the length of the termof years must be ascertainable with certainty at the time of creation of the trust,except that the term may be terminated by the death of the income beneficiary,or by the grantor’s exercise by will of a retained power to revoke or terminatethe interest of any recipient other than a charitable organization. In any event,the period may not extend beyond either the life (or lives) of a named individual(or individuals) or a term of years not to exceed 20 years. For example, thegoverning instrument of a CRAT may not provide for the payment of an annuityamount to A for his life and then to B for a term of years, because it is possiblefor the period to last longer than either the lives of recipients living(technically, “in being”) at the creation of the trust or a term of years not toexceed 20 years. Conversely, the governing instrument of the trust may providefor the payment of an annuity amount to A for his life and then to B for his lifeor a term of years (not to exceed 20 years), whichever is shorter (but notlonger), if both A and B are living at the creation of the trust, because it is notpossible for the period to last longer than the lives of recipients living at thecreation of the trust. 9895 Reg. § 1.664-2(a)(4). The IRS ruled that a CRAT may make distributions of principal and income from timeto time to one or more charitable organizations, during the lifetime of the income interest beneficiary, withoutdisqualifying the trust, as long as the distributions do not endanger the trust’s ability to pay the requisite annuityto the income beneficiary. Priv. Ltr. Rul. 200052035. In another instance, the IRS approved a trust arrangementunder which, during the life of the individual who was the trust’s founder and income beneficiary, thetrustee had to distribute some or all of the trust property to one or more charitable organizations as the grantor/income beneficiary appointed in writing. Priv. Ltr. Rul. 200034019.96 IRC § 664(d)(1)(A).97 Reg. § 1.664-2(a)(5)(i).98 Id. 422