TRUST DOCUMENT PREPARATION AGREEMENT Charitable Remainder Trust

Transcription

1 TRUST DOCUMENT PREPARATION AGREEMENT Charitable Remainder Trust By signing below, I acknowledge, understand, and/or promise the following with respect to the trust document I am requesting in the attached Custom Document Order Form and any assistance I receive from employees of Renaissance Administration LLC and its affiliates. ( Renaissance ) during the document preparation process: 1. I am an attorney at law in good standing with the Bar of the state(s) in which I practice and, in this capacity, I am personally representing the trustmaker(s) identified below and in the attached Custom Document Order Form. 2. In preparing the requested trust document (the Document ) for me, Renaissance will be acting (and must act) solely as my agent, pursuant to my instructions, and as my scrivener only. I reserve the right to determine if, when and how the Document will be presented to my client(s) for execution and funding. All unexecuted originals of the Document must be shipped directly to me unless I provide Renaissance with written instructions to the contrary. 3. I will pay, in advance, the charges described in the attached Custom Document Order Form for the Document and any other forms, memoranda, publications or services requested by me therein. 4. I acknowledge that Renaissance is not a law firm, and that none of its employees (including attorneys) can practice law for me or my client(s) nor render any legal opinions upon which I can or will rely, including (but not limited to) opinions concerning: the legal effect, sufficiency or tax qualification of the Document; the ability of the Document to meet any needs of my client(s); or any trust funding issues. 5. With respect to the Document form and contents, I acknowledge Renaissance and its employees expressly disclaim any warranties whatsoever, including (by way of example and not limitation) any Warranties of Merchantability and/or Warranties of Fitness for a Particular Purpose and I will make no representations to the contrary to my client(s). 7. Neither I nor any legal/professional partnership, association, limited liability company or corporation of which I am a partner, member, shareholder or other affiliate will bring a lawsuit against Renaissance or any persons employed by Renaissance (or join such parties as co-defendants in any lawsuit) in which any of the following grievances are alleged: (a) that the Document is defective in any way, fails to meet any particular needs of the trustmaker(s) or any trust beneficiary, or fails to meet any or all qualification requirements of any applicable state and federal tax and trust law(s); (b) that I relied, to my detriment, on any opinion given to me by any employee of Renaissance concerning the law; or (c) that Renaissance breached any type of warranty in the preparation and form of the Document requested by me. 8. I understand the Document would not be provided to me but for the acknowledgments and promises I am making in the preceding paragraphs and that the same are provided as additional consideration for the services of Renaissance requested herein. Client (s) Signature of Trustmaker s Attorney Printed of Trustmaker s Attorney Date 6. I acknowledge that I am solely responsible for the answers to the questions and the choices made on this form and the contents of the Document. I will advise my client(s) to the extent I deem appropriate concerning said contents and the execution and funding of the trust. Page 1 of 13

2 CUSTOM DOCUMENT ORDER FORM Charitable Remainder Trust DRAFTING ATTORNEY INFORMATION Drafting Attorney DOCUMENT DELIVERY INFORMATION Please indicate if different from Drafting Attorney Information. Firm Attorney Firm Fax Fax Client s Is your client working with a financial planner? (If yes, please complete this section) Fax Please indicate how you would like the documents delivered: (Please note carrier.) (please indicate format) Microsoft Word PDF Hard Copy Carrier: U.S. Mail Priority FedEx Express Overnight UPS Overnight FedEx or UPS Account Number I don t know FedEx or UPS Account In The Of Other: Page 2 of 13

3 FEE POLICY Basic A basic fee of $500 will be charged to the drafting attorney for a customized charitable remainder trust document if it is certain Renaissance Administration LLC will be hired to administer the trust. A basic fee of $1,500 will be charged to the drafting attorney for a customized charitable remainder trust document if it is certain Renaissance Administration will not be hired to administer the trust. The appropriate basic fee must accompany the signed order form before an order will be processed and shipped. PAYMENT POLICY 1. The appropriate fee must accompany the signed order form before an order can be processed and shipped. 2. Payment for services drawn on the personal account (by check or credit card) of a trustmaker, financial planner or any party other than the drafting attorney (or his/her law firm) are not acceptable and will be returned or declined. 3. Credit card orders are acceptable if charges are made to the VISA, MasterCard, Discover, or American Express account of the drafting attorney (or his/her law firm). Please complete the following: Cardholder Extraordinary Service In the unusual case where our standard CRT language must be customized significantly at the drafting attorney s request, drafting modification services will be billed at the rate of $275 per hour, with a minimum charge of $150. A very complex income beneficiary arrangement is an example of a drafting situation in which these charges should be anticipated. Card Number Card Type Expiration Date 3 or 4 Digit Code Page 3 of 13

4 INTER VIVOS CUSTOM DOCUMENT SPECIFICATIONS Charitable Remainder Trust All data supplied herein must be submitted by the drafting attorney. Please respond to all choices and inputs, inserting an n/a if not applicable. order will be shipped until the completed original of this form is signed on page 1 and received by Renaissance. If you need additional space, please copy and attach the appropriate page. NAME OF TRUST A1 Title of Document Insert the name of the trust exactly as you wish for it to appear in the document. of Trust DONOR/TRUSTMAKER INFORMATION B1 Trustmaker 1 Attributes B3 Trustmaker s Guides Renaissance offers a publication entitled A Trustmaker s Guide to enable the donor to better understand the operation of a charitable remainder trust. Please send Do not send INCOME BENEFICIARY INFORMATION C1 Income Beneficiary 1 Attributes Birthday Age Social Security Number B2 Trustmaker 2 Attributes Page 4 of 13

5 INCOME BENEFICIARY INFORMATION (cont.) C2 Income Beneficiary 2 Attributes Birthday Age Social Security Number TRUSTEE INFORMATION: INITIAL PRIMARY TRUSTEE(S) D1 Initial Primary Trustee 1 Attributes NOTE: If there are additional income beneficiaries, please provide the above information in Section H6 or attach a page with this information. C3 Term of Income Interests Please describe the term of income interests, i.e. whether for life(ves) or a term up to 20 years or a combination of these, and specify the relevant beneficiary(ies). Term of Income Interests D2 Initial Primary Trustee 2 Attributes D3 Type of Entity If not an individual, please indicate: Primary Trustee 1 C Corporation S Corporation Partnership Qualified Charity Private Foundation Primary Trustee 2 C Corporation S Corporation Partnership Qualified Charity Private Foundation Page 5 of 13

6 TRUSTEE INFORMATION: SUCCESSOR PRIMARY TRUSTEE(S) D4 Naming Successor Trustee(s) Do you wish to name a specific Successor Trustee in the trust document? D7 Successor Primary Trustee 3 Attributes NOTE: If answered, the standard clause allows the thencurrent income beneficiary, if living and competent, to appoint a successor; but if not, the Administrator may make the appointment. D5 Successor Primary Trustee 1 Attributes To Serve: First Second Third To Serve: First Second Third D6 Successor Primary Trustee 2 Attributes To Serve: First Second Third Page 6 of 13

7 TRUSTEE INFORMATION: INITIAL INDEPENDENT SPECIAL TRUSTEE(S) D8 Independent Special Trustee (IST) Include Independent Special Trustee appointment provisions and name in the body of the trust document the persons or entities described below. Include Independent Special Trustee appointment provisions that call for the appointment of such a trustee in the future, if one is ever needed; however, name no one to this position in the body of the trust document. Include Independent Special Trustee appointment provisions; however, name no one to this position in the body of the trust document. Instead, please provide a separate Independent Special Trustee Appointment tice Form when you ship my order. Include Independent Special Trustee appointment provisions; however, leave a blank line in the document so we may insert the name of an Independent Special Trustee when the document is signed. Exclude Independent Special Trustee appointment provisions, but do not prohibit the trustee from accepting contributions of (or investing in) any types of Unmarketable Assets. Exclude Independent Special Trustee appointment provisions, and prohibit the trustee from accepting contributions of (or investing in) any types of Unmarketable Assets. NOTE: The first 5 options contain a Qualified Appraiser Alternative provision for Unmarketable Asset valuations. D9 Powers of Independent Special Trustee Please choose one of the following: (If no selection is made, the default is valuation and ownership rights.) The Independent Special Trustee shall be authorized to exercise the following powers: Valuation and ownership rights Valuation purposes only D10 Initial Independent Special Trustee 1 Attributes Relationship to Trustmaker 2 To Serve: First Second D11 Initial Independent Special Trustee 2 Attributes Relationship to Trustmaker 2 To Serve: First Second Page 7 of 13

8 D12 Type of Entity If not an individual, please indicate: Independent Special Trustee 1 C Corporation S Corporation Partnership Qualified Charity Private Foundation Independent Special Trustee 2 C Corporation S Corporation Partnership Qualified Charity Private Foundation E2 Charitable Remainder Beneficiary Attributes Please provide the following information for all Charitable Remainder Beneficiaries. Charitable Remainder Beneficiary #1: Full Legal D13 Third-Party Administrator The initial administrator of this trust will be: Renaissance Administration LLC * Other: of Person or Entity Company Percentage Is this a foreign charity? Contact Person Federal I.D.# * ne. The named trustee will provide all administrative services, rather than a third party. * Please see page 3 for an explanation of additional fees due. Designated Use Revocable Irrevocable CHARITABLE REMAINDER BENEFICIARY INFORMATION E1 Charitable Remainder Naming Options d in trust document (please complete E2) t named now (proceed to E4) Provide a blank Schedule C (proceed to E4) Create a Donor Advised Fund with Renaissance Charitable Foundation (proceed to E4) Charitable Remainder Beneficiary #2: Full Legal Percentage Federal I.D.# Is this a foreign charity? Contact Person Designated Use Revocable Irrevocable Page 8 of 13

9 Charitable Remainder Beneficiary #3: Full Legal Percentage Is this a foreign charity? Contact Person Designated Use Revocable Federal I.D.# Irrevocable NOTE: If there are additional charities, please provide the above information in Section H, or attach a separate page with this information. E3 Type of Charitable Entity Qualified Charity #1 #2 #3 Private n- Operating Foundation #1 #2 #3 170(b)(1)(E) #1 #2 #3 E4 Definitions of Qualified Charity Does the trustmaker wish to ever name a non-operating private foundation, i.e., any type of foundation not described in IRC 170(b)(1)(A), as a remainder beneficiary of the trust? NOTE: Naming a private, non-operating foundation as a charitable remainderman will cause charitable income tax deductions for trust contributions to be limited by the 30%/20% contribution base limitations of IRC 170(b)(1)(B) and (D) and the charitable reduction rule of IRC 170(e)(1)(B)(ii). E5 Power to Invade Prinicpal The trust document should: Include the power to invade principal for current distributions to charity Exclude the power to invade principal for current distributions to charity See Treas. Regs (a)(4) and (a)(4); Rev. Rul , 5.05 and 7.05; and PLR CHARITABLE REMAINDER TRUST FEATURES F1 Type of Charitable Remainder Trust Annuity Trust (CRAT) - proceed to section F3 Standard Unitrust (SCRUT) - proceed to section F3 Net Income Unitrust without Make-up Provision (NICRUT) - proceed to section F3 Net Income Unitrust with Make-up Provision (NIMCRUT) - proceed to section F3 Net Income with Make-up Provision Unitrust to SCRUT Flip-trust (Flip-NIMCRUT) - complete F2 of this document Net Income Unitrust without Make-up Provision to SCRUT Flip-trust (FlipNICRUT) - complete F2 of this document F2 Triggering Event Provisions This section is to be completed for Flip Trusts only. The Triggering Event is that event which will terminate the Initial Period at the close of the taxable year in which the Triggering Event occurs. What is the triggering event? The sale or exchange (in whole or in part) of the Unmarketable Assets contributed hereto and described in detail on Schedule A. Date specific: Other: Please draft special language in a separate exhibit and attach to this form. F3 Annuity/Unitrust Amount What payout rate do you select? % Leave a Blank NOTE: The payout rate must be between 5% and 50%, inclusive. See IRC 664(d)(1)(A) and 664(d)(2)(A). Your range of fixed percentage choices for all CRT types may be limited further by the application of the 10% minimum charitable remainder requirement of IRC 664(d)(1)(D) and 664(d)(2)(D). The 5% probability test of Rev. Rul could further limit your range of fixed percentage choices for lifetime CRATs. Please call us if you need assistance in making computations affected by these various limitations. Page 9 of 13

10 F4 Payout Frequency Quarterly Semi-Annually Annually Monthly * * NOTE: Renaissance Administration LLC will administer monthly distributions for SCRUTs and CRATs only. F5 Recipient Distribution Termination Rules Unitrust or Annuity amount distributions to recipients shall (choose one): Be prorated to a current recipient s date of death (or other event terminating the recipient s interest) Terminate with the distribution date next preceding a current recipient s date of death (or other event terminating the recipient s interest). [See Treas. Reg (a)(5) and (a)(5)]. F6 Power to Revoke an Income Interest by Will Trustmaker s Retention of a Testamentary Right to Revoke an Income Interest by Will Exclude Include NOTE: See Treas. Reg (a)(4) and (a)(4); Rev. Rul ; Rev. Rul , 5.07 and F7 Private Foundation Restrictions Regarding IRC Sections 4943 and 4944 Exclude these restrictions Include these Restrictions NOTE: See IRC 4947(a)(2) and Treas. Reg (b). Also see Rev. Rul , 4.06 and F8 Choice of Law Issue If Renaissance Administration LLC will be the trust administrator, Renaissance prefers to use Indiana s Revised Uniform Principal & Income Act. You must respond to both A & B. A. The validity and interpretation of this trust shall be governed by the laws of the state or commonwealth of: B. The trust shall incorporate by reference the default principal and income laws of the following state(s): The state of the trust administrator; or The state identified in F8A above for all intents and purposes; or Other: (Please specify state and satisfy any minimum contact requirements.) C. Please indicate the state in which the document will be signed: F9 Trustee Removal Powers Powers granted to Current Income Beneficiaries. Please respond to both A & B. A. Right to remove PRIMARY Trustee(s) with or without cause: Include Exclude B. Right to remove SPECIAL Trustee(s) with or without cause: Include Exclude N/A NOTE: See Rev. Rul F10 Primary Trustee s Fees Do you wish to preclude the trustmaker from charging a Trustee s fee? F11 Spendthrift Clause Option Exclude a spendthrift clause Include and prohibit both voluntary and involuntary assignments of the income interest Include, but prohibit involuntary assignments of the income interest only Include the spendthrift clause attached hereto and marked Exhibit F12 Pledge of Future Interest as Collateral Optional power to permit a charitable remainderman to pledge its future interest in the trust as collateral for loans from a third party to that charitable remainderman Exclude Include NOTE: See PLR Page 10 of 13

11 FOR SCRUTs AND CRATs, PROCEED TO SECTION H SPECIAL NET INCOME UNITRUST FEATURES G1 Right to Invest in Deferred Annuities Optional right of trustee to invest in deferred annuities where contract appreciation is not distributable as income until received by trustee. Include special income definition and Independent Special Trustee requirement (Please complete G2 of this document.) Include special income definition only. Exclude G5 Depreciation Reserve Requirements for Real Estate The establishment of a reserve for depreciation on real estate held in this trust should be: Discretionary (trustee may set up a reserve) Mandatory (trustee must set up a reserve) Excluded NOTE: See PLR and PLR NOTE: These elective provisions provide a special definition of distributable income and an optional Independent Special Trustee requirement if trustmakers will be serving as primary trustees. G2 Power to Allocate Funds Inside Deferred Annutity The trust document should: Reserve the power to allocate funds inside of a deferred annuity to an independent trustee. Reserve the power to allocate funds inside of a deferred annuity to the primary trustee. Be silent regarding the issue. NOTE: See TAM G3 Net Realized Capital Gains Distribution Do not define distributable income to include net realized, post-contribution capital gains. Do define distributable income to include net realized, post-contribution capital gains. NOTE: See Treas. Reg (a)(1)(b)(2) and PLR G4 Investing in Zero-Coupon Bonds Optional right for trustee to invest in zero-coupon bonds Appreciation not distributable as income until received by trustee. Include Exclude NOTE: See PLR and PLR Page 11 of 13

12 MISCELLANEOUS PROVISIONS H1 Multiple Trustees All trust documents will allow the trustees to act by a simple majority unless the drafting attorney otherwise instructs Renaissance to the contrary. H2 Valuation Date All unitrust documents will automatically use the first business day of each taxable year as the annual valuation date unless the drafting attorney otherwise instructs Renaissance to the contrary. H3 Additional Contributions to Unitrusts All unitrust documents will automatically permit additional contributions via both inter vivos and testamentary transfers unless the drafting attorney otherwise instructs Renaissance to the contrary. H4 Power to Sprinkle Income All trust documents will automatically require annuity and unitrust distributions to the income beneficiaries to be paid equally unless the drafting attorney otherwise instructs Renaissance to the contrary. H5 Qualified Contingencies All trust documents will terminate and pay the remainder interest to the charitable remainder beneficiaries at the end of the measuring lives or specified term of years unless the drafting attorney otherwise instructs Renaissance to the contrary. H6 Special Instructions Special Instructions Page 12 of 13

13 DESCRIPTIONS OF PROPERTY TO BE DONATED I1 Schedule A A blank Schedule A to the trust document will be provided with your order. It is the responsibility of the Trustmaker s attorney to complete this schedule with a description of the property used to fund the trust. I2 Property Contributions Please check or describe the general nature and approximate value of each type of property that is likely to be contributed to this trust within the time frames indicated. Renaissance Administration LLC will need accurate cost basis information for each asset contributed upon submission for administration. Initial Trust Contributions Anticipated Additional Unitrust Contributions (within next 3 years) Asset Type Value (in dollars) Asset Type Value (in dollars) Cash Cash Unrestricted Publicly Traded Stock Unrestricted Publicly Traded Stock Restricted Publicly Traded Stock Restricted Publicly Traded Stock Close Corporation S-Stock Close Corporation S-Stock Close Corporation C-Stock Close Corporation C-Stock Real Estate (see I3 below) Real Estate (see I3 below) Bond/CD Bond/CD te te Annuities (existing policies) Annuities (existing policies) Life Insurance (existing policies) Life Insurance (existing policies) Tangible Personal Property Tangible Personal Property LLC Interest LLC Interest Partnership Interest Partnership Interest Other: Other: TOTAL TOTAL I3 Real Estate Contributions If real estate will be contributed, the Trustmaker must complete a Renaissance Real Estate Gift Analysis Form. This form must be attached to this one and submitted to Renaissance before your document order will be processed. If you do not have this form, please call (800) , or find it at our website: reninc.com. Page 13 of 13