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.
The Georgia Charitable Inter Vivos Lead Annuity Trust, also known as a Georgia SPLIT, is a specialized charitable trust established in the state of Georgia. This trust allows individuals to make a charitable donation while still receiving an income stream during their lifetime. The Georgia SPLIT is a type of Charitable Lead Annuity Trust (FLAT), a common estate planning tool used to benefit charitable organizations. By setting up a Georgia SPLIT, the donor contributes assets to the trust, and the trust pays a fixed annuity to a charitable organization for a specific period of time or until the donor's death. There are different types of Georgia Charitable Inter Vivos Lead Annuity Trusts available based on the specific needs and goals of the donor: 1. Standard Georgia SPLIT: This is the most common type of SPLIT, where donors contribute assets to the trust and receive an annual annuity payment for a predetermined period, typically ranging from five to twenty years. At the end of the specified term, the remaining assets in the trust are transferred to the designated charity. 2. Flip SPLIT: A Flip SPLIT combines elements of the standard SPLIT with a charitable remainder trust. Initially, the FLAT distributes income to a non-charitable beneficiary, such as the donor or a family member. After a preset triggering event, such as the sale of a specific asset, the trust "flips" into a standard SPLIT, with the remaining assets going to the charitable organization. 3. Granter Retained Annuity Trust (GREAT) SPLIT: In this variation, the FLAT is established with a technique called a Granter Retained Annuity Trust. The donor retains an annuity interest for a specific term, and at the end of the term, the remaining trust assets are distributed to the charitable organization. 4. Net Income Charitable Remainder Unit rust (NICEST) SPLIT: This SPLIT variant calculates annuity payments based on the trust's net income rather than a fixed percentage of the trust's initial value. The annuity payment can fluctuate yearly but must be at least 5% of the trust's net fair market value. These different types of Georgia Charitable Inter Vivos Lead Annuity Trusts allow donors to tailor their charitable giving while still ensuring a steady income stream or asset retention during their lifetime. It is important to consult with a qualified estate planning attorney or financial advisor to understand which type of SPLIT best fits individual needs and objectives.
