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CHARITABLE REMAINDER TRUSTSThe 5 percent requirement 206 must be met until the termination of all of the incomepayments. For example, the following provisions would satisfy this requirement:• A fixed percentage of at least 5 percent to A and B for their joint lives andthen to the survivor for his or her life• A fixed percentage of at least 5 percent to A for life or for a term of yearsnot longer than 20 years, whichever is longer (or shorter)• A fixed percentage of at least 5 percent to A for a term of years not longer than20 years and then to B for life (assuming B was living at creation of the trust)• A fixed percentage to A for his life and concurrently a fixed percentage toB for her life (the percentage to each recipient to terminate at his or herdeath), if the percentage given to each individual is not less than 5 percent• A fixed percentage to A for his life and concurrently an equal percentageto B for her life, and at the death of the first to die, the trust to distributeone-half of the then value of its assets to a charitable organization, if thetotal of the percentages is not less than 5 percent for the entire period 207The IRS also approved the following unitrust provision. Each year, quarterlydistributions at an annual rate of 6 percent of the net fair market value of thetrust assets, determined annually, are to be made to B for a term of 20 years. If Bdies before the expiration of the 20-year term, the payments will be made to Cfor the balance of the term remaining. If C also dies before the expiration of the20-year period, then distributions for the balance of the period remaining are tobe made to C’s heirs at law, excluding the donor and his spouse. At the end ofthe 20-year term, the balance remaining in the trust is to be distributed to theremainder interest beneficiary. 208(g) Permissible Remainder Interest BeneficiariesAt the end of the income payment period (see above), the entire corpus of thetrust must be irrevocably transferred, in whole or in part, to or for the use of oneor more charitable organizations or retained, in whole or in part, for a charitableuse 209 or, to the extent the remainder interest is in qualified employer securities,all or part of the securities may be transferred to an employee stock ownershipplan 210 in a qualified gratuitous transfer. 211 The trustee may have the power,206 See §12.3(b).207 Reg. § 1.664-3(a)(5)(ii).208 Rev. Rul. 74-39, 1974-1 C.B. 156.209 IRC § 664(d)(2)(C); Reg. § 1.664-3(a)(6)(i).210 A plan of this nature (authorized by IRC § 4975(e)(7)) is a qualified stock bonus plan or a combination stockbonus and money purchase pension plan under which employer securities are held for the benefit of employees.The securities, which are held by one or more tax-exempt trusts under the plan, may be acquired throughdirect employer contributions or with the proceeds of a loan to the trust or trusts.211 A qualified gratuitous transfer of employer securities to an employee stock ownership plan gives rise to an estatetax charitable contribution deduction based on the present value of the remainder interest. IRC § 2055(a)(5). 438