Making a charitable contribution allows for a tax deduction which is why many people chose to make a contribution. In your situation creating a trust can be very beneficial. The trust can be a Charitable Remainder Annuity Trust (CRAT), a Charitable remainder Unitrust (CRUT) or a split-interest trust. It is important to look at each trust and discuss the advantages and disadvantages to see which would be most beneficial for you. We will go through each one and then I will make a recommendation for what will work best for you. Charitable remainder trusts are irrevocable trusts and there are two different types of trusts which are a CRAT and a CRUT. A CRAT is a trust that pays a fixed amount each year until the trust is terminated. The beneficiaries will receive the same amount regardless if the trust value has increased or decreased. A CRUT will provide income to a named beneficiary during the life of the grantor and then the remainder of the trust to a charitable cause. This trust will pay out a fixed percentage of the trust's net market value which will be determined annually which gets paid to the beneficiaries. Both trusts both also need to provide a minimum of 5% payouts for a term up to 20 years and they must be paid to at least one person or organization that is not charity. A difference between the two is that in a CRAT a donor cannot make additional contributions to the trust but in a CRUT, a donor can make additional contributions. Charitable Remainder Annuity Trust (CRAT) A CRAT has many advantages as well as disadvantages. Once the trust is created, the fixed amount of income will come out annually from the trust. A CRAT would be a good choice to pick for someone who wants a stable, fixed income and who is interested in making only one initial contribution to the trust. An advantage is that your beneficiaries will have a guaranteed income every year and the amount would never fluctuate regardless of the situation. This means that your investment performance could not be doing well and they would still get that fixed amount. Another advantage is that any capital gain that is made on assets is bypassed and you or the other beneficiaries will receive an income interest for life or for a specific amount of years. A disadvantage of a CRAT is that as we already know, the trust would pay a fixed income to the beneficiaries. This is a disadvantage because if the trust is created to last many years, there could be inflation. The investment performance could increase which wouldn't matter if you had a CRUT. Since the trust is an irrevocable trust, the amounts cannot be changed that are received from the CRAT. Another disadvantage is that you cannot add any assets to the trust where in a CRUT you can. Charitable remainder Unitrust (CRUT) A CRUT also has many advantages as well as disadvantages. A CRUT might be a better option for someone who wants to make additional contributions and be able to fund the trust with liquid assets. They would be able to contribute additional assets each year which would also be valued each year. This would result in an increase in the non-charitable beneficiary income and the grantor's tax deductions. A CRAT only comes in one form where a CRUT comes in four sub-varieties. This shows that there is much more flexibility with this trust than a CRAT which is a major advantage. Under IRC 643(b), an optional provision for a CRUT is that the trustee can be required to pay for any year, the lesser of the full amount of the unitrust and trust income. This leads to another advantage which is that a CRUT allows people to use two different payment methods. Unlike a CRAT, a CRUT has income that can fluctuate which could be a disadvantage. If the trust does not have good investments, then the income in the trust will decline. This happens because it is based on a percentage of the fair market value of the assets and is reevaluated every year. However, this could also be an advantage if they do have good investments because then the income in the trust will increase. Split-Interest Trust Another option could be to open a split-interest trust. According to IRC 170 (c)(2)(b), a split-interest trust is a trust that has some unexpired interest that is devoted to purposes other than religious, charitable, or similar purposes that are described in IRC 170(C) and has an amount in the trust for which a charitable contribution is allowed. One advantage of this trust is that donating to a split-interest trust is that the interest in the property donated to the trust is split between the income and the remainder interest. SO WHY IS THIS A BENEFIT BE SEPCIFIC, GIVE AN EXAMPLE Another benefit is that there is flexibility to people who want to open a trust but also have multiple categories of interests. For example, if you used a split trust you would not have created separate trusts to give to your children and a charity. There are a few disadvantages, one of them being that a split-interest trust is not tax-exempt. This means that any income that is earned by the trust in excess of what is paid to charity will be taxable. There is no income tax deduction for you with this trust. As per IRC 501(a), A split-trust is not tax exempt and is revocable. The reasoning for this is because the trust allows for voluntary termination by the grantor. After looking at all the advantages, I do believe that any of these trusts would be a better deal for you (after tax savings) and for the charitable beneficiary. After comparing each trust and their advantages and disadvantages I believe that the CRUT would be best for you. The CRUT offers more flexibility and is more likely than not, the best fit for you and your beneficiaries. The split-interest trust does not provide any tax benefits which is why I would not recommend this for you. As for a CRAT, they also are beneficial but they have less flexibility. To get a better recommendation there are a few more details that would need to be known. For example, we would need your income, age and your overall goals when it comes to your estate planning. Once we receive this information, we can confirm that a CRUT would be most beneficial for you and begin the process of setting one up.

ANSWER: Are there any relevant Treasury regulations or court opinions you can weave into the discussion to supplement what you've said about the Code sections? And for full credit on the grading rubric you would want to add something specific about how and why using one of these three planning methods would not run afoul of the AICPA Code of Conduct or ABA Model Rules of Professional Conduct.

Answer what is in bold