Drew, 72, is a widower with a gross estate worth $975,000. He is in the highest current marginal income tax bracket. Drew would like to make a sizable charitable contribution to the American Diabetes Association, and would like the charitable contribution to provide him with a fixed income for the rest of his life. Which one of the following charitable transfers is most appropriate for Drew to use to best achieve his estate planning objective? A) A charitable remainder annuity trust, since it provides the desired income to Drew B) A charitable outright gift, since it reduces Drew's income tax liability substantially C) A charitable lead trust, since it provides Drew with a fixed income stream D) A charitable remainder unitrust, since it provides Drew with a charitable contribution deduction
Question.
Drew, 72, is a widower with a gross estate worth $975,000. He is in the highest current marginal income tax bracket. Drew would like to make a sizable charitable contribution to the American Diabetes Association, and would like the charitable contribution to provide him with a fixed income for the rest of his life. Which one of the following charitable transfers is most appropriate for Drew to use to best achieve his estate planning objective?
A) A charitable remainder annuity trust, since it provides the desired income to Drew
B) A charitable outright gift, since it reduces Drew's income tax liability substantially
C) A charitable lead trust, since it provides Drew with a fixed income stream
D) A charitable remainder unitrust, since it provides Drew with a charitable contribution deduction
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