Rev. Rul. 76-8

The governing instrument of an inter vivos trust, that otherwise complies with all the requirements of section 664 of the Internal Revenue Code of 1954 and the applicable regulations, provides that the grantor thereof may, at any time, designate, in lieu of the charitable organization named in the trust instrument, another organization satisfying the requirements in sections 170(c), 2055(a), and 2522(a) of the Code as the recipient of the remainder. The regulations provide that a charitable remainder trust may not be subject to a power to invade, alter, amend, or revoke for the beneficial use of a person other than an organization described in section 170(c). See sections 1.664-2(a)(4) and 1.664-3(a)(4) of the Income Tax Regulations.

Held, the reserved power retained by the grantor that permits a discretionary right to designate a substitute remainderman is not a retention of power that would disqualify an otherwise qualifying charitable remainder trust and, thus, the trust qualifies as a charitable remainder trust under section 664 of the Code and the applicable regulations.

See Rev. Rul. 76-7, this page, which deals with a similar power as provided in a testamentary trust.