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.
Maricopa, Arizona Charitable Lead Inter Vivos Unit rust, also known as a CLUB, is a type of charitable trust that allows individuals to support their favorite charitable causes while also providing potential tax benefits. It is a legal arrangement that combines elements of both a charitable lead trust (CLT) and a unit rust. In a Maricopa, Arizona Charitable Lead Inter Vivos Unit rust, the donor transfers assets (such as cash, stocks, or real estate) into the trust, with the primary purpose of providing income to a charitable organization for a predetermined period of time. At the end of this period, the remaining assets are typically distributed to one or more non-charitable beneficiaries, such as family members or friends. There are two main types of Maricopa, Arizona Charitable Lead Inter Vivos Unit rust: 1. Charitable Lead Annuity Unit rust (FLAT): In this type of trust, the annual payment to the charitable organization is based on a fixed percentage of the initial fair market value of the trust assets. This means that the charitable payment remains constant throughout the trust's term, regardless of how the trust assets perform. 2. Charitable Lead Unit rust (CLUB): Unlike the FLAT, the CLUB calculates the annual payment to the charitable organization based on a fixed percentage of the trust's net asset value, which is revalued annually. This means that the annual payment may vary depending on the performance of the trust's assets. If the trust assets experience growth, the charitable payment will increase, providing potential benefits for both the charity and non-charitable beneficiaries. Maricopa, Arizona Charitable Lead Inter Vivos Unit rusts are popular among individuals who have a strong philanthropic inclination and wish to support charitable causes while maintaining some control over the distribution of their assets. By utilizing this type of trust, individuals can create a lasting impact on their communities while potentially reducing their estate tax liabilities and providing for their loved ones. It is essential to consult with an experienced estate planning attorney or financial advisor to understand the legal and financial implications of establishing a Maricopa, Arizona Charitable Lead Inter Vivos Unit rust, as well as to determine which type of trust best aligns with an individual's specific financial goals and charitable intentions.Maricopa, Arizona Charitable Lead Inter Vivos Unit rust, also known as a CLUB, is a type of charitable trust that allows individuals to support their favorite charitable causes while also providing potential tax benefits. It is a legal arrangement that combines elements of both a charitable lead trust (CLT) and a unit rust. In a Maricopa, Arizona Charitable Lead Inter Vivos Unit rust, the donor transfers assets (such as cash, stocks, or real estate) into the trust, with the primary purpose of providing income to a charitable organization for a predetermined period of time. At the end of this period, the remaining assets are typically distributed to one or more non-charitable beneficiaries, such as family members or friends. There are two main types of Maricopa, Arizona Charitable Lead Inter Vivos Unit rust: 1. Charitable Lead Annuity Unit rust (FLAT): In this type of trust, the annual payment to the charitable organization is based on a fixed percentage of the initial fair market value of the trust assets. This means that the charitable payment remains constant throughout the trust's term, regardless of how the trust assets perform. 2. Charitable Lead Unit rust (CLUB): Unlike the FLAT, the CLUB calculates the annual payment to the charitable organization based on a fixed percentage of the trust's net asset value, which is revalued annually. This means that the annual payment may vary depending on the performance of the trust's assets. If the trust assets experience growth, the charitable payment will increase, providing potential benefits for both the charity and non-charitable beneficiaries. Maricopa, Arizona Charitable Lead Inter Vivos Unit rusts are popular among individuals who have a strong philanthropic inclination and wish to support charitable causes while maintaining some control over the distribution of their assets. By utilizing this type of trust, individuals can create a lasting impact on their communities while potentially reducing their estate tax liabilities and providing for their loved ones. It is essential to consult with an experienced estate planning attorney or financial advisor to understand the legal and financial implications of establishing a Maricopa, Arizona Charitable Lead Inter Vivos Unit rust, as well as to determine which type of trust best aligns with an individual's specific financial goals and charitable intentions.
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.
