Which trust is described as paying a fixed percentage of the donated assets’ value at the time of funding?

• A. Charitable remainder unitrust
• B. Qualified personal residence trust
• C. Testamentary trust
• D. Charitable remainder annuity trust

Answer: (D)

The main idea being tested is how charitable remainder trusts determine the payments to the non-charitable beneficiary. A unitrust pays a fixed percentage of the trust’s assets, with the amount recalculated each year based on the then-current value of the trust. That means the payment can go up or down depending on investment performance, while the remainder goes to charity when the trust ends. In contrast, an annuity trust pays a fixed dollar amount each year, not a percentage of the assets. The other options describe different planning tools: a qualified personal residence trust centers on transferring a residence with gift-tax planning, and a testamentary trust is created by a will after death and isn’t defined by a recurring percentage payout. So the description aligns with a charitable remainder unitrust, not an annuity trust.