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.
Contra Costa California Charitable Lead Inter Vivos Unit rust, also known as a CLT, is a specific type of trust arrangement designed to benefit both charitable organizations and individual beneficiaries. This trust allows individuals to provide ongoing support to their favorite charitable causes while still maintaining some control over their assets. Within Contra Costa County, California, several variations of the Charitable Lead Inter Vivos Unit rust exist, each offering unique benefits and options: 1. Standard Contra Costa California Charitable Lead Inter Vivos Unit rust: This is the most common type of CLT in which the trust creator, known as the granter, transfers assets into the trust. The trust subsequently pays a fixed amount to a charitable organization for a specified term or until the granter's passing. After this term, the remaining assets are then distributed to individual beneficiaries, such as family members or other designated individuals. 2. Flip Charitable Lead Inter Vivos Unit rust: This variation allows for the possibility of flipping the payments between charitable organizations and individual beneficiaries. It offers flexibility for the granter, as they can change the charitable beneficiaries if their priorities or preferences change during the trust term. 3. Net Income Charitable Lead Inter Vivos Unit rust: This type of CLT pays out a fixed percentage of the trust's net income rather than a fixed amount. This means the amount distributed to the charitable organizations may vary from year to year, depending on the trust's performance. 4. Charitable Lead Inter Vivos Unit rust with Make-up Provision: This variation allows for the accumulation of any unpaid charitable payments by making up those payments in future years. This provision ensures that the charitable beneficiaries will ultimately receive the agreed-upon sum, even if the trust's income fluctuates or is insufficient in any specific year. The Contra Costa California Charitable Lead Inter Vivos Unit rusts offer significant advantages to both the charitable organizations and individual beneficiaries involved. Charities benefit from receiving ongoing financial support during the trust's term, which can help fund their various programs and initiatives. It also allows individuals to have a lasting impact on their chosen charitable causes, ensuring their philanthropic efforts continue even after their lifetime. For the creator of the trust, the Contra Costa California Charitable Lead Inter Vivos Unit rusts offer potential tax advantages. By funding the trust with appreciated assets, such as stocks or real estate, the granter can potentially avoid capital gains tax while obtaining a charitable deduction. This arrangement allows individuals to maximize their philanthropic contributions while still providing for their loved ones. Overall, the Contra Costa California Charitable Lead Inter Vivos Unit rusts provide a sophisticated and flexible way for individuals to support charitable causes while balancing their personal financial goals. Understanding the various types of Cuts available within Contra Costa County can help individuals tailor their charitable giving strategies to best suit their specific needs and philanthropic objectives.Contra Costa California Charitable Lead Inter Vivos Unit rust, also known as a CLT, is a specific type of trust arrangement designed to benefit both charitable organizations and individual beneficiaries. This trust allows individuals to provide ongoing support to their favorite charitable causes while still maintaining some control over their assets. Within Contra Costa County, California, several variations of the Charitable Lead Inter Vivos Unit rust exist, each offering unique benefits and options: 1. Standard Contra Costa California Charitable Lead Inter Vivos Unit rust: This is the most common type of CLT in which the trust creator, known as the granter, transfers assets into the trust. The trust subsequently pays a fixed amount to a charitable organization for a specified term or until the granter's passing. After this term, the remaining assets are then distributed to individual beneficiaries, such as family members or other designated individuals. 2. Flip Charitable Lead Inter Vivos Unit rust: This variation allows for the possibility of flipping the payments between charitable organizations and individual beneficiaries. It offers flexibility for the granter, as they can change the charitable beneficiaries if their priorities or preferences change during the trust term. 3. Net Income Charitable Lead Inter Vivos Unit rust: This type of CLT pays out a fixed percentage of the trust's net income rather than a fixed amount. This means the amount distributed to the charitable organizations may vary from year to year, depending on the trust's performance. 4. Charitable Lead Inter Vivos Unit rust with Make-up Provision: This variation allows for the accumulation of any unpaid charitable payments by making up those payments in future years. This provision ensures that the charitable beneficiaries will ultimately receive the agreed-upon sum, even if the trust's income fluctuates or is insufficient in any specific year. The Contra Costa California Charitable Lead Inter Vivos Unit rusts offer significant advantages to both the charitable organizations and individual beneficiaries involved. Charities benefit from receiving ongoing financial support during the trust's term, which can help fund their various programs and initiatives. It also allows individuals to have a lasting impact on their chosen charitable causes, ensuring their philanthropic efforts continue even after their lifetime. For the creator of the trust, the Contra Costa California Charitable Lead Inter Vivos Unit rusts offer potential tax advantages. By funding the trust with appreciated assets, such as stocks or real estate, the granter can potentially avoid capital gains tax while obtaining a charitable deduction. This arrangement allows individuals to maximize their philanthropic contributions while still providing for their loved ones. Overall, the Contra Costa California Charitable Lead Inter Vivos Unit rusts provide a sophisticated and flexible way for individuals to support charitable causes while balancing their personal financial goals. Understanding the various types of Cuts available within Contra Costa County can help individuals tailor their charitable giving strategies to best suit their specific needs and philanthropic 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.
