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.
Fulton Georgia Charitable Lead Inter Vivos Unit rust (CLT) is a unique estate planning tool that allows individuals to support charitable causes while also providing financial benefits for their beneficiaries. This type of trust is popular among individuals who want to make a lasting impact on their communities and leave a meaningful philanthropic legacy. A Fulton Georgia Charitable Lead Inter Vivos Unit rust is established when a person (known as the granter) transfers assets into the trust, with the intention of directing income generated from those assets to a charitable organization or cause for a specific period. At the end of this period, the remaining trust assets are passed on to specified beneficiaries. One of the key advantages of a Fulton Georgia CLT is that it provides potential tax benefits for the granter. By donating income to a charitable organization, the granter may reduce their taxable income, potentially lowering their overall tax liability. There are two primary types of Fulton Georgia Charitable Lead Inter Vivos Unit rusts: 1. Charitable Lead Unit rust (CLUB): This type of trust distributes a fixed percentage of the trust's fair market value, reevaluated annually, to the charitable causes designated by the granter. The remaining assets, after the specified period, are either distributed to the granter or passed on to other beneficiaries. 2. Charitable Lead Annuity Trust (FLAT): Unlike a CLUB, a FLAT distributes a fixed amount to the designated charitable causes each year, regardless of the trust's value. Again, after the predetermined period, the remaining assets are either returned to the granter or passed to other beneficiaries. Overall, a Fulton Georgia Charitable Lead Inter Vivos Unit rust offers a flexible and tax-efficient way for individuals to support charitable organizations they are passionate about while also benefiting their loved ones. By engaging in strategic philanthropic planning, individuals can leave a lasting impact on their community and create a positive change for generations to come.
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.
