Contents

CHARITABLE REMAINDER TRUSTS(c) Qualified ContingenciesIf a trust would, but for a qualified contingency, meet the requirements to be aCRAT or CRUT, it is treated as a CRT. 433 For purposes of determining the amountof a charitable contribution in this context (or the actuarial value of any interest), aqualified contingency is not taken into account. 434 That is, in the CRT setting, thevalue of the charitable remainder interest is calculated without regard to the qualifiedcontingency.A qualified contingency is a trust provision stating that, on the happening of acontingency, the annuity interest payments or the unitrust interest paymentswill terminate not later than the payments would otherwise terminate under thetrust. 435EXAMPLE 12.28This is an example of a qualified contingency. A CRT is to pay to X, during X’s life, a qualifyingunitrust amount. On the death of X, if Y survives X, the unitrust amount is to be divided intoequal shares. One share is to be paid to Y during Y’s life. The other share is to be paid in equalportions to A, B, and C, or the survivors of them, during Y’s lifetime. The termination of theunitrust payments at the death of Y is a qualified contingency. aaPriv. Ltr. Rul. 200414011.433 IRC § 664(f)(1).434 IRC § 664(f)(2).435 IRC § 664(f)(3). 476