Bloomberg Tax
March 30, 2023, 6:37 PM

Estate of Block Ruling Shows Need for Care With Trust Planning

Daniel Hauffe
Daniel Hauffe
Practice Lead
Kathleen Adcock
Kathleen Adcock

In Estate of Block v. Commissioner, the Tax Court scrutinized the purported charitable remainder annuity trust (CRAT) and denied the estate’s claimed charitable deduction for the remainder interest because the CRAT’s income interest provision did not comply with the law and the trustees failed to correct the error quickly enough.

A CRAT is a trust that pays a fixed amount or percentage to non-charitable beneficiaries each year for the life of the trust, after which the remaining assets are distributed to a charitable organization.

Even though practitioners may unanimously dismiss the errors as blunders by inexperienced professionals, Estate of ...

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