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.
Tennessee Charitable Lead Inter Vivos Unit rust, also known as CLIENT, is an estate planning tool utilized by individuals in Tennessee to make charitable contributions while retaining some benefits for themselves or their beneficiaries. This trust combines both charitable and non-charitable interests, allowing donors to leave a lasting impact on their community while also providing for their loved ones. Keywords: Tennessee Charitable Lead Inter Vivos Unit rust, CLIENT, estate planning, charitable contributions, beneficiaries, trust, community, impact, loved ones. There are two main types of Tennessee Charitable Lead Inter Vivos Unit rusts: 1. Charitable Lead Annuity Unit rust (CLAUS): This type of CLIENT pays a fixed annual amount, also known as an annuity, to one or more charitable organizations for a specific period of time. The annuity amount is predetermined and fixed, regardless of changes in the trust's value. Once the term ends, the remaining assets are distributed to the non-charitable beneficiaries, such as family members or other designated individuals. 2. Charitable Lead Unit rust (CLUB): In contrast to CLAUS, a Charitable Lead Unit rust pays a fixed percentage, typically a percentage of the trust's assets' fair market value, to the charitable organizations each year. As the trust's value fluctuates, the payments to charitable organizations will vary. Similarly to CLAUS, once the predetermined term concludes, the remaining trust assets are transferred to the non-charitable beneficiaries. Both types of Tennessee Charitable Lead Inter Vivos Unit rusts offer flexibility in terms of choosing the charitable organizations to support and the beneficiaries to provide for. Individuals can select suitable charities, such as educational institutions, healthcare organizations, or any other non-profit of their choice, to receive the annual payments during the term. By establishing a Tennessee Charitable Lead Inter Vivos Unit rust, donors can leave a legacy and support causes they deeply care about, providing ongoing financial support to charitable organizations while ensuring the future financial security of their loved ones. Note: The information provided above is a general description of Tennessee Charitable Lead Inter Vivos Unit rust and its types. It is crucial to consult with a legal advisor or estate planning professional to receive tailored advice and ensure compliance with applicable laws and regulations.Tennessee Charitable Lead Inter Vivos Unit rust, also known as CLIENT, is an estate planning tool utilized by individuals in Tennessee to make charitable contributions while retaining some benefits for themselves or their beneficiaries. This trust combines both charitable and non-charitable interests, allowing donors to leave a lasting impact on their community while also providing for their loved ones. Keywords: Tennessee Charitable Lead Inter Vivos Unit rust, CLIENT, estate planning, charitable contributions, beneficiaries, trust, community, impact, loved ones. There are two main types of Tennessee Charitable Lead Inter Vivos Unit rusts: 1. Charitable Lead Annuity Unit rust (CLAUS): This type of CLIENT pays a fixed annual amount, also known as an annuity, to one or more charitable organizations for a specific period of time. The annuity amount is predetermined and fixed, regardless of changes in the trust's value. Once the term ends, the remaining assets are distributed to the non-charitable beneficiaries, such as family members or other designated individuals. 2. Charitable Lead Unit rust (CLUB): In contrast to CLAUS, a Charitable Lead Unit rust pays a fixed percentage, typically a percentage of the trust's assets' fair market value, to the charitable organizations each year. As the trust's value fluctuates, the payments to charitable organizations will vary. Similarly to CLAUS, once the predetermined term concludes, the remaining trust assets are transferred to the non-charitable beneficiaries. Both types of Tennessee Charitable Lead Inter Vivos Unit rusts offer flexibility in terms of choosing the charitable organizations to support and the beneficiaries to provide for. Individuals can select suitable charities, such as educational institutions, healthcare organizations, or any other non-profit of their choice, to receive the annual payments during the term. By establishing a Tennessee Charitable Lead Inter Vivos Unit rust, donors can leave a legacy and support causes they deeply care about, providing ongoing financial support to charitable organizations while ensuring the future financial security of their loved ones. Note: The information provided above is a general description of Tennessee Charitable Lead Inter Vivos Unit rust and its types. It is crucial to consult with a legal advisor or estate planning professional to receive tailored advice and ensure compliance with applicable laws and regulations.
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.
