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.
Maryland Inter Vivos Granter Charitable Lead Annuity Trust is a legal and financial tool used in estate planning to provide for both your charitable intentions and the financial security of your loved ones. This type of trust is established during the granter's lifetime (inter vivos) and allows them to contribute assets to the trust while retaining control and providing an income stream to a charitable beneficiary. The Maryland Inter Vivos Granter Charitable Lead Annuity Trust operates by making annual fixed payments (annuity) to the charitable beneficiary for a predetermined period. These payments can be a set dollar amount or a percentage of the trust's initial value. After the specified period ends, the remaining assets in the trust are either returned to the granter or distributed to other named beneficiaries, usually family members. One noteworthy variation of the Maryland Inter Vivos Charitable Lead Annuity Trust is the "Granter Retained Annuity Trust" (GREAT). A GREAT allows the granter to receive annuity payments for a predetermined period, with any remaining assets passing to the ultimate beneficiaries, such as family members or other designated individuals, typically free from estate and gift taxes. Another variation is the "Granter Charitable Lead Unit rust" (GLUT), which instead of fixed annuity payments, provides a variable annual payment to the charitable beneficiary, typically based on a percentage of the trust's value recalculated annually. Maryland Inter Vivos Granter Charitable Lead Annuity Trust offers several advantages. Firstly, it allows the granter to support charitable causes during their lifetime, seeing the impact of their contribution firsthand. Additionally, by donating through a trust, potential estate tax can be reduced or eliminated on the assets placed in the trust, providing potential tax benefits for the granter's estate. Moreover, depending on the terms of the trust, the granter may receive an income tax deduction for the present value of the charitable payments. It is essential to work with qualified legal and financial professionals when considering the establishment of a Maryland Inter Vivos Granter Charitable Lead Annuity Trust. They can guide you through the complex legal and tax implications to ensure the trust aligns with your charitable goals and financial objectives.Maryland Inter Vivos Granter Charitable Lead Annuity Trust is a legal and financial tool used in estate planning to provide for both your charitable intentions and the financial security of your loved ones. This type of trust is established during the granter's lifetime (inter vivos) and allows them to contribute assets to the trust while retaining control and providing an income stream to a charitable beneficiary. The Maryland Inter Vivos Granter Charitable Lead Annuity Trust operates by making annual fixed payments (annuity) to the charitable beneficiary for a predetermined period. These payments can be a set dollar amount or a percentage of the trust's initial value. After the specified period ends, the remaining assets in the trust are either returned to the granter or distributed to other named beneficiaries, usually family members. One noteworthy variation of the Maryland Inter Vivos Charitable Lead Annuity Trust is the "Granter Retained Annuity Trust" (GREAT). A GREAT allows the granter to receive annuity payments for a predetermined period, with any remaining assets passing to the ultimate beneficiaries, such as family members or other designated individuals, typically free from estate and gift taxes. Another variation is the "Granter Charitable Lead Unit rust" (GLUT), which instead of fixed annuity payments, provides a variable annual payment to the charitable beneficiary, typically based on a percentage of the trust's value recalculated annually. Maryland Inter Vivos Granter Charitable Lead Annuity Trust offers several advantages. Firstly, it allows the granter to support charitable causes during their lifetime, seeing the impact of their contribution firsthand. Additionally, by donating through a trust, potential estate tax can be reduced or eliminated on the assets placed in the trust, providing potential tax benefits for the granter's estate. Moreover, depending on the terms of the trust, the granter may receive an income tax deduction for the present value of the charitable payments. It is essential to work with qualified legal and financial professionals when considering the establishment of a Maryland Inter Vivos Granter Charitable Lead Annuity Trust. They can guide you through the complex legal and tax implications to ensure the trust aligns with your charitable goals and financial objectives.
