Concurrent and Consecutive Interests For Two Measuring Lives (CRAT)

This legal template pertains to the establishment and administration of a Charitable Remainder Annuity Trust (CRAT) under the laws of the United States. Specifically, it focuses on the concurrent and consecutive interests of two measuring lives within the trust.

A CRAT is a type of irrevocable trust that allows individuals to contribute assets to a trust while retaining an income stream for a specified period or lifetime. After this income period, the remaining trust assets are distributed to a designated charitable organization or foundation.

In this context, the legal template outlines how the CRAT will be structured to provide income interests to two measuring lives, which can be any individuals or entities chosen by the donor. It describes the necessary provisions and requirements to ensure the fair and equitable distribution of income during the specified time frame.

The template may cover topics such as:

1. Identification of the two measuring lives: Clearly defining the individuals or entities whose lives will be used as measuring lives to determine the duration of income interests.

2. Concurrent interests: Explaining how the trust will distribute income concurrently to both measuring lives during their lifetimes.

3. Consecutive interests: Outlining how the trust will transition from concurrent to consecutive interests after the death of one measuring life. When this occurs, the remaining measuring life becomes the sole recipient of the income until their death, at which point the charitable distribution is made.

4. Determination of annuity payments: Providing guidelines for calculating and distributing annuity payments to the measuring lives during the specified period. This may involve discussing the frequency, amount, and adjustments to be made, if any.

5. Tax considerations: Mentioning the tax implications associated with creating and managing the CRAT, such as income tax deductions for the donor and potential capital gains taxes upon the trust's termination.

6. Plan termination and charitable distribution: Specifying the circumstances under which the trust will be terminated and outlining the procedures for distributing the remaining trust assets to the designated charitable organization or foundation.

It is important to note that this description serves as a general overview and the actual legal template may contain additional or specific provisions to comply with state and federal laws, as well as the donor's intentions and preferences.