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98-169, Vol. I at 732 (Comm. Print 1984). Here the trust was
validly formulated, and its terms were within the statutory
threshold requirements. Accordingly, reformation is not needed
to “rewrite” incorrect terms. The operational failure cannot be
corrected by reformation. Therefore, the concept of reformation
has no application here.
Payments to Birchfield
In addition to the failure in operation that occurred when
no payments were made to decedent in accordance with the trust
terms, the trust is disqualified from being a CRAT because it
will be necessary to invade the trust to satisfy the obligations
of the estate, which include the estate and death taxes
apportionable to Mary Birchfield’s beneficial interest in the
trust. The estate bears the responsibility for those tax
payments. As discussed earlier, the funds in the administrative
trust are not sufficient to pay decedent’s debts, the
administration expenses, and estate and death taxes. The
shortfall will have to come out of the trust corpus. Pursuant to
section 664(d)(1)(B), no amount of the trust, other than the
annuity, may be paid to or for the use of any person other than
an organization described in section 170(c). Because the trust
corpus will be invaded to pay expenses or debts of the estate,
including estate taxes, a substantial part of the trust funds may
be diverted from the charitable remainder. This is an additional
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