In a charitable lead trust, the lifetime payments go to the charity and the remainder returns to the donor or to the donor's estate or other beneficiaries. 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. Unlike a charitable remainder trust, a charitable lead annuity trust creates no income tax deduction to the donor, but the income earned in the trust is not attributed to donor. The trust itself is taxed according to trust rates. The trust receives an income tax deduction for the income paid to charity.
Connecticut Charitable Inter Vivos Lead Annuity Trust (CI LAT) is a legal arrangement established by individuals in the state of Connecticut to benefit charitable organizations and minimize estate taxes. It can be described as a form of charitable giving that provides specific financial advantages. A CI LAT is a type of irrevocable trust designed to transfer assets to a qualified charity while also providing an annual income stream to non-charitable beneficiaries. The main purpose of this trust is to make a charitable gift during the granter's lifetime while still receiving income from the trust assets. By transferring assets into the trust, the individual can generate potential tax benefits and support their chosen charity. In Connecticut, there are two different types of Charitable Inter Vivos Lead Annuity Trust: 1. Grantor-Retained Annuity Trust (GREAT): A GREAT is a type of charitable lead annuity trust where the granter retains the right to receive an annuity payment for a fixed term. At the end of the term, the remaining assets in the trust pass to the designated charity. This type of trust allows the granter to potentially reduce the taxable value of their estate while providing financial support to charitable organizations. 2. Non-Grantor Charitable Lead Annuity Trust (FLAT): In a FLAT, the granter does not retain any interest in the trust, and the annuity payments pass directly to a qualified charity. This type of trust can provide significant estate tax benefits by removing assets from the granter's taxable estate. It allows the granter to support charitable causes during their lifetime while minimizing estate taxes for their beneficiaries. Connecticut Charitable Inter Vivos Lead Annuity Trusts offer several benefits, including potential income tax deductions, estate tax reduction, and the fulfillment of philanthropic goals. To establish a CI LAT, it is essential to consult with an experienced estate planning attorney or financial professional who can provide guidance specific to an individual's financial situation and charitable intentions.Connecticut Charitable Inter Vivos Lead Annuity Trust (CI LAT) is a legal arrangement established by individuals in the state of Connecticut to benefit charitable organizations and minimize estate taxes. It can be described as a form of charitable giving that provides specific financial advantages. A CI LAT is a type of irrevocable trust designed to transfer assets to a qualified charity while also providing an annual income stream to non-charitable beneficiaries. The main purpose of this trust is to make a charitable gift during the granter's lifetime while still receiving income from the trust assets. By transferring assets into the trust, the individual can generate potential tax benefits and support their chosen charity. In Connecticut, there are two different types of Charitable Inter Vivos Lead Annuity Trust: 1. Grantor-Retained Annuity Trust (GREAT): A GREAT is a type of charitable lead annuity trust where the granter retains the right to receive an annuity payment for a fixed term. At the end of the term, the remaining assets in the trust pass to the designated charity. This type of trust allows the granter to potentially reduce the taxable value of their estate while providing financial support to charitable organizations. 2. Non-Grantor Charitable Lead Annuity Trust (FLAT): In a FLAT, the granter does not retain any interest in the trust, and the annuity payments pass directly to a qualified charity. This type of trust can provide significant estate tax benefits by removing assets from the granter's taxable estate. It allows the granter to support charitable causes during their lifetime while minimizing estate taxes for their beneficiaries. Connecticut Charitable Inter Vivos Lead Annuity Trusts offer several benefits, including potential income tax deductions, estate tax reduction, and the fulfillment of philanthropic goals. To establish a CI LAT, it is essential to consult with an experienced estate planning attorney or financial professional who can provide guidance specific to an individual's financial situation and charitable intentions.
