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.
Lima Arizona Charitable Lead Inter Vivos Unit rust (also known as Lima AZ CLT) is a type of trust that combines charitable giving with estate planning strategies. This charitable lead trust allows individuals to provide support to charitable organizations or causes of their choice while also securing certain financial benefits for themselves or their beneficiaries. The primary purpose of a Lima Arizona Charitable Lead Inter Vivos Unit rust is to generate income for a specified period, during which the trust distributes funds to one or more charitable beneficiaries. These beneficiaries can be non-profit organizations, educational institutions, or other eligible charitable entities. The trust is referred to as "inter vivos" as it is established during the lifetime of the granter (person creating the trust) and "unit rust" as the distribution to the charitable beneficiaries is based on a fixed percentage of the trust's value, which is reevaluated annually. There are several types of Lima Arizona Charitable Lead Inter Vivos Unit rusts, including: 1. Standard Charitable Lead Inter Vivos Unit rust: This is the most common form of a Lima AZ CLT, where a specific percentage of the trust's value is distributed to the charitable beneficiaries annually, typically for a fixed number of years. 2. Flip Unit rust: With this type of Lima Arizona Charitable Lead Inter Vivos Unit rust, the income distribution to the charitable beneficiaries is variable. Initially, a fixed percentage of the trust's value is paid to the granter or other non-charitable beneficiaries. After a triggering event, such as the sale of a specific asset, the income stream "flips" to the charitable beneficiaries. 3. Granter Retained Annuity Trust (GREAT) and Granter Retained Unit rust (GUT): These types of Lima AZ Cuts are similar to the standard unit rust but with a significant difference. The granter retains the right to an annual fixed payment for a specific term of years or for life instead of receiving income distributions generated by the trust assets themselves. By utilizing a Lima Arizona Charitable Lead Inter Vivos Unit rust, individuals can reduce their tax liability, protect assets, and make a meaningful impact on charitable causes that are close to their hearts. It is essential to consult with legal and financial professionals to ensure compliance with relevant laws and to tailor the trust's provisions to individual objectives.Lima Arizona Charitable Lead Inter Vivos Unit rust (also known as Lima AZ CLT) is a type of trust that combines charitable giving with estate planning strategies. This charitable lead trust allows individuals to provide support to charitable organizations or causes of their choice while also securing certain financial benefits for themselves or their beneficiaries. The primary purpose of a Lima Arizona Charitable Lead Inter Vivos Unit rust is to generate income for a specified period, during which the trust distributes funds to one or more charitable beneficiaries. These beneficiaries can be non-profit organizations, educational institutions, or other eligible charitable entities. The trust is referred to as "inter vivos" as it is established during the lifetime of the granter (person creating the trust) and "unit rust" as the distribution to the charitable beneficiaries is based on a fixed percentage of the trust's value, which is reevaluated annually. There are several types of Lima Arizona Charitable Lead Inter Vivos Unit rusts, including: 1. Standard Charitable Lead Inter Vivos Unit rust: This is the most common form of a Lima AZ CLT, where a specific percentage of the trust's value is distributed to the charitable beneficiaries annually, typically for a fixed number of years. 2. Flip Unit rust: With this type of Lima Arizona Charitable Lead Inter Vivos Unit rust, the income distribution to the charitable beneficiaries is variable. Initially, a fixed percentage of the trust's value is paid to the granter or other non-charitable beneficiaries. After a triggering event, such as the sale of a specific asset, the income stream "flips" to the charitable beneficiaries. 3. Granter Retained Annuity Trust (GREAT) and Granter Retained Unit rust (GUT): These types of Lima AZ Cuts are similar to the standard unit rust but with a significant difference. The granter retains the right to an annual fixed payment for a specific term of years or for life instead of receiving income distributions generated by the trust assets themselves. By utilizing a Lima Arizona Charitable Lead Inter Vivos Unit rust, individuals can reduce their tax liability, protect assets, and make a meaningful impact on charitable causes that are close to their hearts. It is essential to consult with legal and financial professionals to ensure compliance with relevant laws and to tailor the trust's provisions to individual 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.
