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petitioners of the way in which a charitable remainder unitrust
could facilitate these aims. He, as well as petitioners’
accountant, Tim Kehl, also explained the tax consequences of such
an arrangement.
Petitioners decided to form a charitable remainder unitrust,
and the trust instrument was prepared by Mr. Polse. Petitioners
were designated as the income beneficiaries of the Jorgl Unitrust
(the trust), and Project Grant a Wish was named the charitable
remainder beneficiary. For their lifetimes, petitioners were to
receive annual distributions totaling the lesser of the trust
income for the taxable year or 9 percent of the fair market value
of the trust assets. The trust was irrevocable, and petitioners
were given no rights to or control over trust assets beyond
receipt of the above-specified distributions. Following their
deaths, the trust would terminate and Project Grant a Wish would
receive the trust corpus. Cupertino National Bank was named as
the trustee.
On June 26, 1991, petitioner as grantor and Cupertino
National Bank as trustee executed a “Charitable Remainder
Unitrust Agreement”. On June 27, 1991, the stock certificate
transferring all of petitioner’s shares in Little Rascals to
Cupertino National Bank as trustee for the Jorgl Unitrust was
signed. Petitioners continued to serve as employees, officers,
and directors of Little Rascals.
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