§ 36C-4B-3. Definitions.
§ 36C‑4B‑3. Definitions.
The following definitionsapply to this Article unless the context clearly requires otherwise:
(1) "Charitableremainder trust" means a trust that provides for a specified distributionat least annually for either life or a term of years to one or morebeneficiaries, at least one of which is not a charity (hereinafter referred toas "beneficiaries"), with an irrevocable remainder interest to beheld for the benefit of, or paid over to, charity. For purposes of this Article,only a charitable remainder annuity trust or a charitable remainder unitrust isconsidered a charitable remainder trust.
(2) "Charitableremainder annuity trust" means a charitable remainder trust:
a. From which a sumcertain (that is not less than five percent (5%) of the initial net fair marketvalue of all property placed in trust) is to be paid at least annually to oneor more persons (at least one of which is not an organization described insection 170(c) of the Internal Revenue Code and, in the case of individuals,only to an individual who was living at the time of the creation of the trust)for a term of years (not in excess of 20 years) or for the life or lives ofthat individual or those individuals; however, in the case of an individual,the amount to be paid to that individual may be subject to a qualifiedcontingency according to the terms of the governing instrument;
b. From which no amountother than the payments described in sub‑subdivision a. of thissubdivision may be paid to or for or both to and for the use of anyone otherthan an organization that is or was described in section 170(c) of the InternalRevenue Code; and
c. Following thetermination of the payments described in sub‑subdivision a. of thissubdivision, the remainder interest in the trust is to be transferred to, orfor the use of, an organization that is or was described in section 170(c) ofthe Internal Revenue Code or is to be retained by the trust for that use.
(3) "Charitableremainder unitrust" means a charitable remainder trust:
a. From which a fixedpercentage (that is not less than five percent (5%)) of the net fair marketvalue of its assets, valued annually, is to be paid at least annually to one ormore persons (at least one of which is not an organization described in section170(c) of the Internal Revenue Code and, in the case of individuals, only to anindividual who was living at the time of the creation of the trust) for a termof years (not in excess of 20 years) or for the life or lives of thatindividual or those individuals; however, in the case of an individual, theamount to be paid to that individual may be made subject to a qualifiedcontingency according to the terms of the governing instrument;
b. From which no amountother than the payments described in sub‑subdivision a. of thissubdivision may be paid to or for the use of anyone other than an organizationthat is or was an organization described in section 170(c) of the InternalRevenue Code; and
c. Following thetermination of the payments described in sub‑subdivision a. of thissubdivision, the remainder interest in the trust is to be transferred to, orfor the use of, an organization that is or was described in section 170(c) ofthe Internal Revenue Code, or is to be retained by the trust for such a use.
Notwithstandingsub‑subdivisions a. and b. of this subdivision, the trust instrument mayprovide that the trustee shall pay to the income beneficiary for any year (i)the amount of the trust income if that amount is less than the amount requiredto be distributed under sub‑subdivision a. of this subdivision, and (ii)any amount of the trust income that exceeds the amount required to bedistributed under sub‑subdivision a. of this subdivision to the extentthat (by reason of sub‑subdivision a.) the aggregate of the amounts paidin prior years is less than the aggregate of the required amounts.
(4) "Qualifiedcontingency" means any provision of the governing instrument that providesthat, upon the happening of a contingency, the payments made to an individualnoncharitable beneficiary of a charitable remainder trust will terminate notlater than those payments would otherwise terminate under the governinginstrument. (1981(Reg. Sess., 1982), c. 1252, s. 1; 1985, c. 406, ss. 1‑3; 2005‑192,s. 2.)