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.
Keywords: Kansas, Inter Vivos Granter Charitable Lead Annuity Trust, detailed description, types Title: Understanding the Kansas Inter Vivos Granter Charitable Lead Annuity Trust: Exploring Different Types Introduction: The Kansas Inter Vivos Granter Charitable Lead Annuity Trust is a specific type of charitable trust that allows individuals to support charitable organizations while retaining control of their assets during their lifetime. This detailed description aims to shed light on the concepts, benefits, and various types of this unique trust instrument. 1. Kansas Inter Vivos Granter Charitable Lead Annuity Trust Overview: The Kansas Inter Vivos Granter Charitable Lead Annuity Trust (KIVG-CLAT) is a trust arrangement where a donor transfers assets to the trust for a fixed period, during which annual annuity payments are paid to a chosen charitable organization. Upon the trust's termination, the remaining assets are typically transferred to the donor's chosen beneficiaries. 2. Benefits of KIVG-CLAT: — Philanthropic Impact: KIVG-CLAT enables donors to support charitable causes or organizations they care about while alive, ensuring their legacy. — Tax Advantages: By establishing a KIVG-CLAT, donors may potentially enjoy income tax deductions and minimize estate taxes, enhancing the overall tax efficiency of their financial planning. 3. Types of Kansas Inter Vivos Granter Charitable Lead Annuity Trust: a) Charitable Lead Annuity Trust (FLAT): Under this structure, the donor specifies a fixed annuity payment amount to be distributed to the chosen charity throughout the trust's term. Class are valued based on the present value of the annuity payments, and any growth exceeding the annuity amount is ultimately passed on to the beneficiaries. b) Charitable Lead Unit rust (CLUB): Unlike Class, Clubs distribute a fixed percentage (typically between 5-7%) of the trust's fair market value each year to the charitable organization. As the trust's assets experience growth or depreciation, the annuity amount fluctuates accordingly, potentially facilitating greater flexibility and allowing for inflation protection. c) Non-Grantor Charitable Lead Trust: Non-Grantor Class and Clubs are structured in a way that the trust itself, rather than the donor, becomes responsible for income tax payments on trust income and gains. This arrangement can provide additional tax planning opportunities, especially for high-net-worth individuals. Conclusion: The Kansas Inter Vivos Granter Charitable Lead Annuity Trust is a sophisticated estate planning tool, offering individuals various alternatives to support charitable organizations while availing potential tax benefits. By familiarizing oneself with the different types available, individuals can tailor the trust to align with their philanthropic goals and financial circumstances. Seeking advice from legal and financial professionals is essential when considering the establishment of a Kansas Inter Vivos Granter Charitable Lead Annuity Trust.
