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.
The Phoenix Arizona Charitable Lead Inter Vivos Unit rust is a unique estate planning tool that provides philanthropic individuals with the opportunity to support charitable causes while still benefiting from their assets during their lifetime. This type of trust allows individuals to combine their charitable desires with the flexibility of an inter vivos trust, ensuring a seamless transfer of assets and support for the chosen charities. In this type of trust, the donor transfers assets, such as cash, securities, or real estate, into the trust, which then determines the income that will be distributed to one or more charitable organizations. The income could be a fixed amount or a fixed percentage of the trust's value, depending on the terms and conditions set forth in the trust document. One of the main advantages of the Phoenix Arizona Charitable Lead Inter Vivos Unit rust is that it allows individuals to support causes they are passionate about while reducing their potential estate taxes. By designating the charitable organization(s) as the income recipient(s) during a specified period, the donor can effectively remove assets from their taxable estate. This structured approach allows for greater control over the distribution of assets, ensuring that the charitable organization(s) receive ongoing support and that remaining assets go to designated beneficiaries upon the trust's termination. Additionally, there are two types of Charitable Lead Inter Vivos Unit rusts available in Phoenix, Arizona, each offering distinct options: 1. Non-Flip Unit rust: — In this type of trust, the income distribution remains fixed throughout the trust's existence. The trustee distributes a predetermined percentage of the trust's assets or a fixed dollar amount to the named charitable organization(s) annually. Any remaining trust assets after the specified period pass to non-charitable beneficiaries. 2. Flip Unit rust: Wit Flintnt itit rustst, the income distribution changes after a specific triggering event, typically the sale of a specific asset. Prior to the triggering event, the trust pays a fixed percentage of trust assets' fair market value to the charitable organization(s). After the event, the trust's assets may be invested in income-generating assets with the income distributed to non-charitable beneficiaries. By choosing the Phoenix Arizona Charitable Lead Inter Vivos Unit rust, individuals can leave a lasting impact on their community while still enjoying the benefits of their assets during their lifetime. Whether opting for a non-flip or a flip unit rust, this type of trust offers flexibility and tailored giving options to support charitable causes, promote causes close to one's heart, and potentially provide financial planning advantages.The Phoenix Arizona Charitable Lead Inter Vivos Unit rust is a unique estate planning tool that provides philanthropic individuals with the opportunity to support charitable causes while still benefiting from their assets during their lifetime. This type of trust allows individuals to combine their charitable desires with the flexibility of an inter vivos trust, ensuring a seamless transfer of assets and support for the chosen charities. In this type of trust, the donor transfers assets, such as cash, securities, or real estate, into the trust, which then determines the income that will be distributed to one or more charitable organizations. The income could be a fixed amount or a fixed percentage of the trust's value, depending on the terms and conditions set forth in the trust document. One of the main advantages of the Phoenix Arizona Charitable Lead Inter Vivos Unit rust is that it allows individuals to support causes they are passionate about while reducing their potential estate taxes. By designating the charitable organization(s) as the income recipient(s) during a specified period, the donor can effectively remove assets from their taxable estate. This structured approach allows for greater control over the distribution of assets, ensuring that the charitable organization(s) receive ongoing support and that remaining assets go to designated beneficiaries upon the trust's termination. Additionally, there are two types of Charitable Lead Inter Vivos Unit rusts available in Phoenix, Arizona, each offering distinct options: 1. Non-Flip Unit rust: — In this type of trust, the income distribution remains fixed throughout the trust's existence. The trustee distributes a predetermined percentage of the trust's assets or a fixed dollar amount to the named charitable organization(s) annually. Any remaining trust assets after the specified period pass to non-charitable beneficiaries. 2. Flip Unit rust: Wit Flintnt itit rustst, the income distribution changes after a specific triggering event, typically the sale of a specific asset. Prior to the triggering event, the trust pays a fixed percentage of trust assets' fair market value to the charitable organization(s). After the event, the trust's assets may be invested in income-generating assets with the income distributed to non-charitable beneficiaries. By choosing the Phoenix Arizona Charitable Lead Inter Vivos Unit rust, individuals can leave a lasting impact on their community while still enjoying the benefits of their assets during their lifetime. Whether opting for a non-flip or a flip unit rust, this type of trust offers flexibility and tailored giving options to support charitable causes, promote causes close to one's heart, and potentially provide financial planning advantages.
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.
