A Word on Charitable Remainder Trusts

As a lawyer and an estate planner, I generally read your columns with interest because the personal planning topics that you cover may affect me as an attorney or my clients. “Care in Setting Up Family Trusts Can Head Off Problems” (June 9) was no exception.

One point, however. In the sidebar “Understanding Trusts,” in the discussion of charitable remainder trusts, you state, “They’ll get a charitable deduction for the full value of the stock . . . (subject to some tax limits).” The biggest “limit” most taxpayers will encounter is that they will not get a deduction for the “full value” of the contribution but, rather, for the present value of the charitable remainder interest. In many cases, the charitable deduction is significantly less than half the value of the contributed property, depending upon the age of the donor/beneficiary, the annuity or unitrust rate selected, current applicable federal rate, etc.

TIMOTHY J. KAY

Irvine

Editor’s Note: In light of the record number of bank mergers and acquisitions in recent years, readers may also be interested to know that Financial Code Section 4842 provides that if a trust is transferred pursuant to a sale of the bank or trust company, it can be fairly easy to replace the corporate trustee.