In a charitable lead trust, a donor transfers property to the lead trust, which pays a percentage of the value of the trust assets, usually for a term of years, to the charity. At the end of the trust term, the remaining assets in the trust and any growth it has realized are passed to donor's heirs. Although there is no income tax deduction when the donor creates a charitable lead trust, his/her gift or estate tax is greatly discounted and any growth is passed to his/her heirs gift and estate tax free.
In a charitable lead unitrust, a donor irrevocably transfers cash, closely held securities or other valuable property to a trustee who, during the unitrusts term, invests the unitrust's assets. Each year, the trustee distributes a fixed percentage of the unitrust's net asset value, as calculated annually, to a named charity. These payments are made out of trust income (or trust principal if the trust income is not adequate) and are tax deductible as a charitable contribution for the year in which they are made. If, however, trust income exceeds the charitable payment for a given year, the trust pays income tax on the excess.
When the lead unitrust term ends, the unitrust distributes the remainder of its accumulated assets to a non-charitable remainderman, usually family members or other beneficiaries named by the donor. That amount is subject to federal gift tax based on the current fair market value of the gift at the time the trust is established. Gift tax is paid on the remainder interest as calculated from the current fair market value of the asset at the time the trust is established; generally this amount is much less than the estate tax would be on the asset as calculated at the time it is inherited.
The Hawaii Charitable Lead Inter Vivos Unit rust is a unique charitable planning tool that allows individuals to support charitable organizations while also providing for their personal financial needs. This trust combines elements of a charitable lead trust and a charitable remainder trust, offering individuals the opportunity to make a meaningful impact on their community. A Charitable Lead Inter Vivos Unit rust (CLT) is a legal instrument that allows individuals, known as granters, to transfer assets, such as real estate, stocks, or cash, into a trust for the benefit of a charitable organization. The trust is set up for a specified term, during which the charitable organization receives annual payments from the trust's income. These payments are often a fixed percentage of the fair market value of the trust assets at the time of the trust's creation. There are different types of Hawaii Charitable Lead Inter Vivos Unit rusts that individuals can choose from based on their specific charitable goals and financial situation. Some key variations include: 1. Non-Reversionary CLT: In this type of CLT, any remaining assets or income at the end of the trust term go to non-charitable beneficiaries, such as family members or the granter. This allows individuals to provide for their loved ones while also supporting charitable causes. 2. Diversionary CLT: With a diversionary CLT, any remaining assets revert to the granter or designated non-charitable beneficiary at the end of the trust term. This type of CLT ensures that the granter retains control over the trust assets and can benefit from any appreciation in their value. 3. Charitable Successor Trust: This type of CLT allows the granter to name a charitable organization as the remainder beneficiary after the trust term ends. This ensures that the remaining trust assets continue to support charitable causes for years to come. By utilizing a Hawaii Charitable Lead Inter Vivos Unit rust, individuals can maximize the impact of their charitable giving while also enjoying certain tax benefits. The trust income paid to the charitable organization is generally tax-deductible, reducing the granter's current income tax liability. Additionally, any appreciation in the trust assets is excluded from the granter's estate, potentially reducing estate taxes upon their passing. In conclusion, the Hawaii Charitable Lead Inter Vivos Unit rust is a versatile charitable planning tool that enables individuals to support charitable causes, provide for loved ones, and optimize their tax planning strategies. With various types of Cuts available, individuals can customize their charitable giving plans to align with their values and financial objectives.The Hawaii Charitable Lead Inter Vivos Unit rust is a unique charitable planning tool that allows individuals to support charitable organizations while also providing for their personal financial needs. This trust combines elements of a charitable lead trust and a charitable remainder trust, offering individuals the opportunity to make a meaningful impact on their community. A Charitable Lead Inter Vivos Unit rust (CLT) is a legal instrument that allows individuals, known as granters, to transfer assets, such as real estate, stocks, or cash, into a trust for the benefit of a charitable organization. The trust is set up for a specified term, during which the charitable organization receives annual payments from the trust's income. These payments are often a fixed percentage of the fair market value of the trust assets at the time of the trust's creation. There are different types of Hawaii Charitable Lead Inter Vivos Unit rusts that individuals can choose from based on their specific charitable goals and financial situation. Some key variations include: 1. Non-Reversionary CLT: In this type of CLT, any remaining assets or income at the end of the trust term go to non-charitable beneficiaries, such as family members or the granter. This allows individuals to provide for their loved ones while also supporting charitable causes. 2. Diversionary CLT: With a diversionary CLT, any remaining assets revert to the granter or designated non-charitable beneficiary at the end of the trust term. This type of CLT ensures that the granter retains control over the trust assets and can benefit from any appreciation in their value. 3. Charitable Successor Trust: This type of CLT allows the granter to name a charitable organization as the remainder beneficiary after the trust term ends. This ensures that the remaining trust assets continue to support charitable causes for years to come. By utilizing a Hawaii Charitable Lead Inter Vivos Unit rust, individuals can maximize the impact of their charitable giving while also enjoying certain tax benefits. The trust income paid to the charitable organization is generally tax-deductible, reducing the granter's current income tax liability. Additionally, any appreciation in the trust assets is excluded from the granter's estate, potentially reducing estate taxes upon their passing. In conclusion, the Hawaii Charitable Lead Inter Vivos Unit rust is a versatile charitable planning tool that enables individuals to support charitable causes, provide for loved ones, and optimize their tax planning strategies. With various types of Cuts available, individuals can customize their charitable giving plans to align with their values and financial objectives.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
