Correct.
Second, “ trust could just be a living trust that avoids probate but is not taxable” just wrong. A living trust avoids probate, but it’s just as liable for income and inheritance taxes as an individual.
Not correct. This would be deemed a grantor trust, which is a disregarded entity for income tax purposes. He would be responsible personally for the tax on any trust income. Also, trusts don't pay inheritance taxes. Since it's a grantor trust the value of the trust assets would be deemed to be owned by him for estate tax purposes and would be added to the value of his estate subject to estate tax.
It’s been about 25 years since I worked in estate planning, but I believe I am correct.
charitable remainder trust
An arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living. The beneficiaries receive the income and the charity receives the principal after a specified period of time. The grantor avoids any capital gains tax on the donated assets, and also gets an income tax deduction for the fair market value of the remainder interest that the trust earned. In addition, the asset is removed from the estate, reducing subsequent estate taxes. While the contribution is irrevocable, the grantor may have some control over the way the assets are invested, and may even switch from one charity to another (as long as it’s still a qualified charitable organization). CRTs come in three types: charitable remainder annuity trust (which pays a fixed dollar amount annually), a charitable remainder unitrust (which pays a fixed percentage of the trust’s value annually), and a charitable pooled income fund (which is set up by the charity, enabling many donors to contribute).
http://www.investorwords.com/830/charitable_remainder_trust.html#ixzz33stQEVX6