What happens to the status of a trust if it is revocable at creation?

A trust that is revocable at creation does not qualify as a CRAT (Charitable Remainder Annuity Trust), CRUT (Charitable Remainder Unitrust), or a Pooled Income Fund. This is because these particular types of trusts are designed to provide specific tax benefits tied to charitable giving, and they typically require that the trust be irrevocable once it is established.

When a trust is revocable, the grantor retains the ability to alter or terminate the trust during their lifetime, which is inconsistent with the requirements for a CRAT or a CRUT, where the assets must be irrevocably committed to the charitable purpose after the trust is created. The revocability of the trust indicates that it does not meet the structural criteria necessary for these charitable trust classifications, which are designed to ensure that the charitable intent is locked in and that the tax advantages can be utilized in accordance with IRS regulations.

Consequently, this classification impacts the ability of the trust to qualify for any of the specific tax benefits associated with charitable remainder trusts and pooled income funds, reinforcing that a revocable trust does not align with the requirements of these types of trusts.