CES Charitable Planning & Philanthropy

Question 1

Under a Charitable Remainder Trust (CRT), after the income interest period ends, the remaining trust assets pass to:

Accepted Answer

A qualified charity

Answer

The grantor's estate

Answer

The grantor's heirs

Answer

A successor trust

Question 2

A Charitable Lead Trust (CLT) differs from a Charitable Remainder Trust (CRT) in that:

Accepted Answer

The charity receives the income interest first, with the remainder passing to non-charitable beneficiaries

Answer

Non-charitable beneficiaries receive income first, with the remainder passing to charity

Answer

Only public charities may receive distributions from a CLT

Answer

A CLT must be revocable while a CRT must be irrevocable

Question 3

Which of the following best describes a Donor Advised Fund (DAF)?

Accepted Answer

A charitable giving account administered by a sponsoring organization where donors can recommend grants over time

Answer

An irrevocable trust that pays income to a charity for a stated term

Answer

A pooled investment vehicle exclusively available to private foundations

Answer

A government-sponsored retirement account with embedded charitable giving features

Question 4

For a Charitable Remainder Annuity Trust (CRAT), the required minimum payout rate is:

Accepted Answer

5% of the initial fair market value of trust assets

Answer

3% of the initial fair market value of trust assets

Answer

5% of the annually revalued fair market value of trust assets

Answer

10% of the initial fair market value of trust assets

Question 5

The primary distinction between a Charitable Remainder Annuity Trust (CRAT) and a Charitable Remainder Unitrust (CRUT) is:

Accepted Answer

A CRAT pays a fixed dollar annuity; a CRUT pays a fixed percentage of annually revalued trust assets

Answer

A CRAT pays a fixed percentage of annually revalued assets; a CRUT pays a fixed dollar annuity

Answer

A CRAT benefits public charities; a CRUT benefits private foundations

Answer

A CRAT is revocable; a CRUT is irrevocable

Question 6

To qualify as a valid Charitable Remainder Trust, the present value of the remainder interest passing to charity must be at least:

Accepted Answer

10% of the initial net fair market value of assets transferred

Answer

5% of the initial net fair market value of assets transferred

Answer

15% of the initial net fair market value of assets transferred

Answer

20% of the initial net fair market value of assets transferred

Question 7

Under IRC Section 4942, private foundations must distribute for charitable purposes at least what percentage of their net investment assets each year?

Accepted Answer

5%

Answer

3%

Answer

10%

Answer

15%