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.
The Louisiana Inter Vivos Granter Charitable Lead Annuity Trust (LIGHT) is a specific type of trust established in the state of Louisiana. This trust combines aspects of both charitable giving and estate planning, allowing individuals to support charitable causes while potentially reducing their estate tax liability. The LIGHT functions by transferring assets to the trust, which then provides annual payments to a designated charitable organization for a specific period of time. At the end of the trust term, the remaining assets are typically distributed to non-charitable beneficiaries, such as family members or other individuals named in the trust. There are different types of Lights depending on how they are structured and the intended goals of the granter. Some common variations include: 1. Charitable Lead Annuity Trust (FLAT): This type of LIGHT pays a fixed annuity amount to the designated charity throughout the trust term, regardless of changes in the trust's value. Once the trust term ends, the remaining assets pass to the non-charitable beneficiaries. 2. Charitable Lead Unit rust (CLUB): Unlike a FLAT, a CLUB pays a fixed percentage of the trust assets' fair market value to the charitable organization each year. As the trust assets increase in value, the annual payments also rise. At the end of the trust term, any remaining assets are distributed to non-charitable beneficiaries. 3. Net Income with Makeup Charitable Lead Unit rust (TIMEOUT): In a TIMEOUT, the trust pays a fixed percentage of the trust's net income to the charitable organization annually, with the ability to make up any missed payments in future years. Upon the trust's termination, the remaining assets pass to the non-charitable beneficiaries. 4. Flip Charitable Lead Trust (Flip CLT): This type of LIGHT allows the trust to transition from making charitable payments to non-charitable beneficiaries if certain triggering events occur. For example, the trust might flip if the trust value increases above a predetermined threshold. 5. Non-Grantor Charitable Lead Annuity Trust (NGC LAT): In an NGC LAT, the trust is not included in the granter's estate for tax purposes. This type of LIGHT can provide additional tax benefits for the granter, as the trust assets are essentially removed from their estate. Overall, the Louisiana Inter Vivos Granter Charitable Lead Annuity Trust offers a powerful tool for individuals wishing to support charitable organizations while simultaneously integrating estate planning strategies. It is advisable for individuals considering establishing such trusts to consult with an experienced estate planning attorney to ensure compliance with applicable laws and achieve their specific goals.The Louisiana Inter Vivos Granter Charitable Lead Annuity Trust (LIGHT) is a specific type of trust established in the state of Louisiana. This trust combines aspects of both charitable giving and estate planning, allowing individuals to support charitable causes while potentially reducing their estate tax liability. The LIGHT functions by transferring assets to the trust, which then provides annual payments to a designated charitable organization for a specific period of time. At the end of the trust term, the remaining assets are typically distributed to non-charitable beneficiaries, such as family members or other individuals named in the trust. There are different types of Lights depending on how they are structured and the intended goals of the granter. Some common variations include: 1. Charitable Lead Annuity Trust (FLAT): This type of LIGHT pays a fixed annuity amount to the designated charity throughout the trust term, regardless of changes in the trust's value. Once the trust term ends, the remaining assets pass to the non-charitable beneficiaries. 2. Charitable Lead Unit rust (CLUB): Unlike a FLAT, a CLUB pays a fixed percentage of the trust assets' fair market value to the charitable organization each year. As the trust assets increase in value, the annual payments also rise. At the end of the trust term, any remaining assets are distributed to non-charitable beneficiaries. 3. Net Income with Makeup Charitable Lead Unit rust (TIMEOUT): In a TIMEOUT, the trust pays a fixed percentage of the trust's net income to the charitable organization annually, with the ability to make up any missed payments in future years. Upon the trust's termination, the remaining assets pass to the non-charitable beneficiaries. 4. Flip Charitable Lead Trust (Flip CLT): This type of LIGHT allows the trust to transition from making charitable payments to non-charitable beneficiaries if certain triggering events occur. For example, the trust might flip if the trust value increases above a predetermined threshold. 5. Non-Grantor Charitable Lead Annuity Trust (NGC LAT): In an NGC LAT, the trust is not included in the granter's estate for tax purposes. This type of LIGHT can provide additional tax benefits for the granter, as the trust assets are essentially removed from their estate. Overall, the Louisiana Inter Vivos Granter Charitable Lead Annuity Trust offers a powerful tool for individuals wishing to support charitable organizations while simultaneously integrating estate planning strategies. It is advisable for individuals considering establishing such trusts to consult with an experienced estate planning attorney to ensure compliance with applicable laws and achieve their specific goals.
