Ans: c A charitable organization is entitled to either an income interest or a remainder interest or both from the trust because a charitable trust is a set of assets, usually liquid that a donor signs over or uses to create a charitable foundation. The assets are held and managed by the charity for a specified period of time, with some or all interest that the assets produce going to the charity. This can be in the form of a permanently specified amount every year, called an annuity or a unitrust, which calculates annual payments based on a percentage of the trust\'s value in a given year and is thus subject to change. Charitable trusts come in two basic types: remainder trusts and lead trusts. Under a remainder trust, assets are signed over to a charitable organization for a specific period of time. This can be for any period of time, either a few years, or well after the donor\'s death. Once the agreed-upon period of time is over, the assets become the property of the charity, as well as any interest or profits that might have been generated. The other type of charitable trust is a lead trust. In many ways, a charitable lead trust is the mirror image of a remainder trust, rather than giving control of a set of properties over to a charity, the donor retains control. Any interest that comes from the trust\'s assets either goes to the charity or is split between the charity and the donor\'s beneficiaries. Then, when the trust expires, rather than the charity gaining control of the donation at the time of the trust\'s termination, it reverts back to a party of the donor\'s choosing, usually their heirs or beneficiaries. Solution Ans: c A charitable organization is entitled to either an income interest or a remainder interest or both from the trust because a charitable trust is a set of assets, usually liquid that a donor signs over or uses to create a charitable foundation. The assets are held and managed by the charity for a specified period of time, with some or all interest that the assets produce going to the charity. This can be in the form of a permanently specified amount every year, called an annuity or a unitrust, which calculates annual payments based on a percentage of the trust\'s value in a given year and is thus subject to change. Charitable trusts come in two basic types: remainder trusts and lead trusts. Under a remainder trust, assets are signed over to a charitable organization for a specific period of time. This can be for any period of time, either a few years, or well after the donor\'s death. Once the agreed-upon period of time is over, the assets become the property of the charity, as well as any interest or profits that might have been generated. The other type of charitable trust is a lead trust. In many ways, a charitable lead trust is the mirror image of a remainder trust, rather than giving control of a set of properties over to a charity, the donor retains control. Any interest that comes from the trust\'s assets .

1. Ans: c
A charitable organization is entitled to either an income interest or a remainder interest or both
from the trust because a charitable trust is a set of assets, usually liquid that a donor signs over or
uses to create a charitable foundation. The assets are held and managed by the charity for a
specified period of time, with some or all interest that the assets produce going to the charity.
This can be in the form of a permanently specified amount every year, called an annuity or a
unitrust, which calculates annual payments based on a percentage of the trust's value in a given
year and is thus subject to change.
Charitable trusts come in two basic types: remainder trusts and lead trusts. Under a remainder
trust, assets are signed over to a charitable organization for a specific period of time. This can be
for any period of time, either a few years, or well after the donor's death. Once the agreed-upon
period of time is over, the assets become the property of the charity, as well as any interest or
profits that might have been generated.
The other type of charitable trust is a lead trust. In many ways, a charitable lead trust is the
mirror image of a remainder trust, rather than giving control of a set of properties over to a
charity, the donor retains control. Any interest that comes from the trust's assets either goes to
the charity or is split between the charity and the donor's beneficiaries. Then, when the trust
expires, rather than the charity gaining control of the donation at the time of the trust's
termination, it reverts back to a party of the donor's choosing, usually their heirs or
beneficiaries.
Solution
Ans: c
A charitable organization is entitled to either an income interest or a remainder interest or both
from the trust because a charitable trust is a set of assets, usually liquid that a donor signs over or
uses to create a charitable foundation. The assets are held and managed by the charity for a
specified period of time, with some or all interest that the assets produce going to the charity.
This can be in the form of a permanently specified amount every year, called an annuity or a
unitrust, which calculates annual payments based on a percentage of the trust's value in a given
year and is thus subject to change.
Charitable trusts come in two basic types: remainder trusts and lead trusts. Under a remainder
trust, assets are signed over to a charitable organization for a specific period of time. This can be
for any period of time, either a few years, or well after the donor's death. Once the agreed-upon
period of time is over, the assets become the property of the charity, as well as any interest or

2. profits that might have been generated.
The other type of charitable trust is a lead trust. In many ways, a charitable lead trust is the
mirror image of a remainder trust, rather than giving control of a set of properties over to a
charity, the donor retains control. Any interest that comes from the trust's assets either goes to
the charity or is split between the charity and the donor's beneficiaries. Then, when the trust
expires, rather than the charity gaining control of the donation at the time of the trust's
termination, it reverts back to a party of the donor's choosing, usually their heirs or
beneficiaries.