A Grantor Charitable Lead Annuity Trust (CLAT) is an irrevocable split-interest trust that provides for a specified amount to be paid to one or more charitable beneficiaries during the term of the trust. The principal remaining in the trust at the end of the term is paid over to, or held in a continuing trust for, a non-charitable beneficiary or beneficiaries identified in the trust. If the terms of a CLAT created during the donor's life satisfy the applicable statutory and regulatory requirements, a gift of the charitable lead annuity interest will qualify for the gift tax charitable deduction under § 2522(c)(2)(B) and/or the estate tax charitable deduction under § 2055(e)(2)(B). In certain cases, the gift of the annuity interest may also qualify for the income tax charitable deduction under § 170(a). The value of the remainder interest is a taxable gift by the donor at the time of the donor's contribution to the trust.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
Houston Texas Inter Vivos Granter Charitable Lead Annuity Trust (FLAT) is a specific type of charitable trust that allows individuals to make a charitable gift while still retaining some control over their assets during their lifetime. This trust, established inter vivos (meaning during the granter's lifetime), is a popular estate planning tool in Houston, Texas, and offers several benefits for both the granter and charitable organizations. The Houston Texas Inter Vivos Granter FLAT functions by transferring assets, such as cash, securities, or real estate, into the trust. The granter, who is the creator of the trust, designates a charitable organization or organizations as the lead beneficiary. This means that the chosen charitable organization will receive fixed annuity payments from the trust for a specified period or until the granter's passing. Once the annuity period ends, the remaining assets in the trust are distributed to non-charitable beneficiaries, typically family members or other individuals designated by the granter. There are different types of Houston Texas Inter Vivos Granter Charitable Lead Annuity Trusts, including: 1. Charitable Lead Annuity Trust (FLAT): This is the most common type of FLAT where the charitable organization receives a fixed annuity payment for a predetermined term. The annuity payment must be made at least annually and can provide a steady income stream to the charitable organization. 2. Flip FLAT: In a Flip FLAT, the charitable lead interest converts to a non-charitable beneficiary interest after a specified triggering event occurs. This event could be a certain date, the occurrence of a specific condition, or the value of the trust's assets reaching a predetermined threshold. The non-charitable beneficiary may include family members or other individuals. 3. TIMEOUT: The Net Income with Makeup Charitable Remainder Unit rust (TIMEOUT) is a variation of the FLAT. In this type of trust, the charitable organization receives a fixed annuity payment based on the trust's net income. If the trust's net income is insufficient to meet the annuity requirement, the shortfall is made up in future years when the trust's net income exceeds the requirement. Key benefits of Houston Texas Inter Vivos Granter Charitable Lead Annuity Trust include: 1. Charitable giving: By establishing this trust, individuals can make a meaningful impact on charitable organizations and causes they care about during their lifetime. 2. Tax advantages: The granter may benefit from income, gift, and estate tax deductions for the charitable contributions made to the trust. Additionally, any appreciation in the trust's assets during the annuity period will pass to the non-charitable beneficiaries without incurring gift or estate taxes. 3. Asset protection: The assets placed within the trust are protected from potential creditors and legal claims after the annuity period ends. 4. Legacy preservation: The granter can designate non-charitable beneficiaries to receive the remaining trust assets, ensuring that their loved ones are provided for after their passing. The Houston Texas Inter Vivos Granter Charitable Lead Annuity Trust is a sophisticated estate planning tool that allows individuals to support charitable organizations while enjoying various tax benefits and maintaining control over their assets during their lifetime. Consulting with an experienced attorney or financial advisor in Houston, Texas, is essential to tailor this trust to the specific needs and goals of the granter.Houston Texas Inter Vivos Granter Charitable Lead Annuity Trust (FLAT) is a specific type of charitable trust that allows individuals to make a charitable gift while still retaining some control over their assets during their lifetime. This trust, established inter vivos (meaning during the granter's lifetime), is a popular estate planning tool in Houston, Texas, and offers several benefits for both the granter and charitable organizations. The Houston Texas Inter Vivos Granter FLAT functions by transferring assets, such as cash, securities, or real estate, into the trust. The granter, who is the creator of the trust, designates a charitable organization or organizations as the lead beneficiary. This means that the chosen charitable organization will receive fixed annuity payments from the trust for a specified period or until the granter's passing. Once the annuity period ends, the remaining assets in the trust are distributed to non-charitable beneficiaries, typically family members or other individuals designated by the granter. There are different types of Houston Texas Inter Vivos Granter Charitable Lead Annuity Trusts, including: 1. Charitable Lead Annuity Trust (FLAT): This is the most common type of FLAT where the charitable organization receives a fixed annuity payment for a predetermined term. The annuity payment must be made at least annually and can provide a steady income stream to the charitable organization. 2. Flip FLAT: In a Flip FLAT, the charitable lead interest converts to a non-charitable beneficiary interest after a specified triggering event occurs. This event could be a certain date, the occurrence of a specific condition, or the value of the trust's assets reaching a predetermined threshold. The non-charitable beneficiary may include family members or other individuals. 3. TIMEOUT: The Net Income with Makeup Charitable Remainder Unit rust (TIMEOUT) is a variation of the FLAT. In this type of trust, the charitable organization receives a fixed annuity payment based on the trust's net income. If the trust's net income is insufficient to meet the annuity requirement, the shortfall is made up in future years when the trust's net income exceeds the requirement. Key benefits of Houston Texas Inter Vivos Granter Charitable Lead Annuity Trust include: 1. Charitable giving: By establishing this trust, individuals can make a meaningful impact on charitable organizations and causes they care about during their lifetime. 2. Tax advantages: The granter may benefit from income, gift, and estate tax deductions for the charitable contributions made to the trust. Additionally, any appreciation in the trust's assets during the annuity period will pass to the non-charitable beneficiaries without incurring gift or estate taxes. 3. Asset protection: The assets placed within the trust are protected from potential creditors and legal claims after the annuity period ends. 4. Legacy preservation: The granter can designate non-charitable beneficiaries to receive the remaining trust assets, ensuring that their loved ones are provided for after their passing. The Houston Texas Inter Vivos Granter Charitable Lead Annuity Trust is a sophisticated estate planning tool that allows individuals to support charitable organizations while enjoying various tax benefits and maintaining control over their assets during their lifetime. Consulting with an experienced attorney or financial advisor in Houston, Texas, is essential to tailor this trust to the specific needs and goals of the granter.
Para su conveniencia, debajo del texto en español le brindamos la versiĂ³n completa de este formulario en inglĂ©s. For your convenience, the complete English version of this form is attached below the Spanish version.
