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.
Hawaii Inter Vivos Granter Charitable Lead Annuity Trust (HILT) is a legal and financial arrangement designed to support charitable causes while providing financial benefits to the granter and their beneficiaries. A HILT is an irrevocable trust established during the granter's lifetime, making it an inter vivos trust. A Hawaii Inter Vivos Granter Charitable Lead Annuity Trust operates by transferring assets to the trust, which generates income through investment. The income is then distributed to one or more charitable organizations over a specified period, serving as a regular stream of support. The amount distributed as charitable contributions is determined at the time of trust creation and remains the same throughout the duration of the trust. While the trust is in operation, beneficiaries, typically family members or loved ones of the granter, may receive residual funds after the charitable donations are made. The residual beneficiaries reap the financial benefits once the trust's charitable obligations have been fulfilled. The Hawaii Inter Vivos Granter Charitable Lead Annuity Trust serves multiple purposes. Firstly, it allows granters to support causes they are passionate about by providing consistent financial contributions. Secondly, it provides residual beneficiaries with financial security and a potential inheritance once the charitable obligations are met. It is essential to note that there are different types of Hawaii Inter Vivos Granter Charitable Lead Annuity Trusts which offer flexibility to accommodate various needs and objectives: 1. Non-Grantor Hawaii Inter Vivos Charitable Lead Annuity Trust (NGHI-CLAT): In this type, the granter does not retain any control or benefit during the trust term, and the trust becomes a tax-exempt entity. Any income generated is used for charitable donations. 2. Granter Hawaii Inter Vivos Charitable Lead Annuity Trust (CHITCHAT): The granter retains certain interests or benefits during the trust term, which results in a taxable gift deduction. The residual beneficiaries receive the remaining assets after the charitable obligations. 3. Non-Grantor Limitation Hawaii Inter Vivos Charitable Lead Annuity Trust (NGLHI-CLAT): This type provides a cap or limitation on the charitable deduction for the granter while also allowing residual beneficiaries to benefit from any excess appreciation on the trust's assets. By utilizing Hawaii Inter Vivos Granter Charitable Lead Annuity Trusts, individuals can make a lasting impact on charitable causes while simultaneously securing the financial future of their loved ones. Understanding the different types of trusts available ensures that granters can tailor their philanthropic endeavors to align with their unique circumstances and objectives.
