Arizona Charitable Remainder Inter Vivos Annuity Trust

• Category: Trusts - Living Trusts
• State: Multi-State
• Control #: US-00615BG
• Format: Word; Rich Text

Description

The following form is a sample of a charitable remainder inter vivos annuity trust. Arizona Charitable Remainder Inter Vivos Annuity Trust (AZ CAT) is a philanthropic vehicle that allows individuals to support charitable causes while receiving financial benefits during their lifetime. It is a type of irrevocable trust established during the granter's lifetime, with the principal distributed to designated charity(IES) upon the granter's death. With an AZ CAT, the granter contributes assets such as cash, securities, real estate, or other appreciated property into the trust, which is managed by a trustee. The trustee then pays a fixed annuity amount to the granter or another beneficiary designated by the granter for a specified period, which is usually the granter's lifetime or a predetermined term of up to 20 years. During the trust term, the granter or beneficiary receives a set annuity payment that is determined at the time of the trust creation. This fixed annuity payment can be a percentage of the initial trust value at the time it was established, typically ranging between 5% and 8%. AZ Cats offer several benefits to the granter. Firstly, it provides a lifetime income stream for the granter or beneficiaries, which can be particularly advantageous for those who want to supplement their retirement or generate a predictable income. Secondly, the granter receives an immediate income tax deduction for the present value of the remainder interest that will ultimately go to charity. The deduction can help reduce the granter's overall tax liability and potentially create a more efficient estate plan. Furthermore, by funding an AZ CAT, the granter can bypass capital gains taxes on appreciated assets. Since the trust is a tax-exempt entity, the trustee can sell appreciated assets without incurring capital gains tax, allowing for the full proceeds to be reinvested and used to generate income for the granter. Different types of Arizona Charitable Remainder Inter Vivos Annuity Trusts include: 1. Standard Charitable Remainder Inter Vivos Annuity Trust: This is the most common type of AZ CAT, where the annuity payment is fixed and predetermined. 2. Net Income Charitable Remainder Inter Vivos Annuity Trust: In this variation, the annuity payment is based on the trust's net income for each year, which may fluctuate based on the trust's investment performance. 3. Flip Charitable Remainder Inter Vivos Annuity Trust: This type allows for a change in the distribution method from an annuity trust to a unit rust at a specified triggering event. It offers flexibility in managing income streams based on the changing needs of the granter or beneficiaries. In conclusion, the Arizona Charitable Remainder Inter Vivos Annuity Trust allows individuals to fulfill their philanthropic goals while benefiting from a predictable income stream and potential tax advantages. It is important to consult with professionals experienced in estate planning and philanthropy to determine the most suitable AZ CAT variation based on individual circumstances and goals.

Arizona Charitable Remainder Inter Vivos Annuity Trust (AZ CAT) is a philanthropic vehicle that allows individuals to support charitable causes while receiving financial benefits during their lifetime. It is a type of irrevocable trust established during the granter's lifetime, with the principal distributed to designated charity(IES) upon the granter's death. With an AZ CAT, the granter contributes assets such as cash, securities, real estate, or other appreciated property into the trust, which is managed by a trustee. The trustee then pays a fixed annuity amount to the granter or another beneficiary designated by the granter for a specified period, which is usually the granter's lifetime or a predetermined term of up to 20 years. During the trust term, the granter or beneficiary receives a set annuity payment that is determined at the time of the trust creation. This fixed annuity payment can be a percentage of the initial trust value at the time it was established, typically ranging between 5% and 8%. AZ Cats offer several benefits to the granter. Firstly, it provides a lifetime income stream for the granter or beneficiaries, which can be particularly advantageous for those who want to supplement their retirement or generate a predictable income. Secondly, the granter receives an immediate income tax deduction for the present value of the remainder interest that will ultimately go to charity. The deduction can help reduce the granter's overall tax liability and potentially create a more efficient estate plan. Furthermore, by funding an AZ CAT, the granter can bypass capital gains taxes on appreciated assets. Since the trust is a tax-exempt entity, the trustee can sell appreciated assets without incurring capital gains tax, allowing for the full proceeds to be reinvested and used to generate income for the granter. Different types of Arizona Charitable Remainder Inter Vivos Annuity Trusts include: 1. Standard Charitable Remainder Inter Vivos Annuity Trust: This is the most common type of AZ CAT, where the annuity payment is fixed and predetermined. 2. Net Income Charitable Remainder Inter Vivos Annuity Trust: In this variation, the annuity payment is based on the trust's net income for each year, which may fluctuate based on the trust's investment performance. 3. Flip Charitable Remainder Inter Vivos Annuity Trust: This type allows for a change in the distribution method from an annuity trust to a unit rust at a specified triggering event. It offers flexibility in managing income streams based on the changing needs of the granter or beneficiaries. In conclusion, the Arizona Charitable Remainder Inter Vivos Annuity Trust allows individuals to fulfill their philanthropic goals while benefiting from a predictable income stream and potential tax advantages. It is important to consult with professionals experienced in estate planning and philanthropy to determine the most suitable AZ CAT variation based on individual circumstances and goals.