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.
Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust is a type of estate planning tool that allows individuals in Pennsylvania to create a charitable trust while retaining income from the donated assets during their lifetime. This unique trust structure combines elements of both a lead trust and an inter vivos trust. A charitable lead trust is set up in a way that ensures a specific charity or charitable cause receives an income stream from the trust's assets for a designated period. The donor, also known as the granter, may choose to make periodic payments to the charity either through a fixed percentage of the trust's value or a fixed dollar amount. The income payments are made for a predetermined term or until the granter's death. An inter vivos trust, on the other hand, is a trust that is created and funded during the granter's lifetime. It allows the granter to transfer assets into the trust for the benefit of beneficiaries or charitable organizations while maintaining some level of control over how the assets are managed or distributed. The Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust combines these two concepts by donating income from the trust to a charitable organization for a specific period and, at the end of the term, returning the remaining trust assets to the granter or their designated beneficiaries. This allows the granter to support a charitable cause while still having the ability to benefit from the assets during their lifetime. There may be different variations or types of Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rusts, depending on the specific terms set by the granter. For instance, the granter can establish a Charitable Lead Unit rust with a fixed percentage payout, meaning that a predetermined percentage of the trust's value is paid to the charity each year. Alternatively, a Charitable Lead Annuity Trust can be created, where a fixed dollar amount is paid to the charity annually. The Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust offers several benefits. Firstly, it allows the granter to support charitable causes and organizations that they care about. Secondly, it provides potential income tax deductions for the charitable contributions made during the granter's lifetime. Lastly, this trust structure is a valuable tool for estate planning, as it can help reduce estate taxes and provide a smooth transfer of assets to beneficiaries or the granter themselves. In summary, the Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust is an estate planning device that combines elements of a lead trust and an inter vivos trust. It enables the granter to support charitable causes while retaining income from the donated assets during their lifetime. Different variations of this trust can be established, such as the Charitable Lead Unit rust or Charitable Lead Annuity Trust, depending on the granter's preferences.Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust is a type of estate planning tool that allows individuals in Pennsylvania to create a charitable trust while retaining income from the donated assets during their lifetime. This unique trust structure combines elements of both a lead trust and an inter vivos trust. A charitable lead trust is set up in a way that ensures a specific charity or charitable cause receives an income stream from the trust's assets for a designated period. The donor, also known as the granter, may choose to make periodic payments to the charity either through a fixed percentage of the trust's value or a fixed dollar amount. The income payments are made for a predetermined term or until the granter's death. An inter vivos trust, on the other hand, is a trust that is created and funded during the granter's lifetime. It allows the granter to transfer assets into the trust for the benefit of beneficiaries or charitable organizations while maintaining some level of control over how the assets are managed or distributed. The Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust combines these two concepts by donating income from the trust to a charitable organization for a specific period and, at the end of the term, returning the remaining trust assets to the granter or their designated beneficiaries. This allows the granter to support a charitable cause while still having the ability to benefit from the assets during their lifetime. There may be different variations or types of Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rusts, depending on the specific terms set by the granter. For instance, the granter can establish a Charitable Lead Unit rust with a fixed percentage payout, meaning that a predetermined percentage of the trust's value is paid to the charity each year. Alternatively, a Charitable Lead Annuity Trust can be created, where a fixed dollar amount is paid to the charity annually. The Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust offers several benefits. Firstly, it allows the granter to support charitable causes and organizations that they care about. Secondly, it provides potential income tax deductions for the charitable contributions made during the granter's lifetime. Lastly, this trust structure is a valuable tool for estate planning, as it can help reduce estate taxes and provide a smooth transfer of assets to beneficiaries or the granter themselves. In summary, the Allegheny Pennsylvania Charitable Lead Inter Vivos Unit rust is an estate planning device that combines elements of a lead trust and an inter vivos trust. It enables the granter to support charitable causes while retaining income from the donated assets during their lifetime. Different variations of this trust can be established, such as the Charitable Lead Unit rust or Charitable Lead Annuity Trust, depending on the granter's preferences.
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.
