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.
Puerto Rico Inter Vivos Granter Charitable Lead Annuity Trust (PR-IGCLAT) is a legal instrument used for charitable planning and wealth transfer in Puerto Rico. This trust allows individuals to support charitable causes while maintaining control over the assets during their lifetime. Here are different types of Puerto Rico Inter Vivos Granter Charitable Lead Annuity Trusts: 1. Charitable Lead Annuity Trust (FLAT): This type of PR-IGCLAT provides a fixed annual payment to selected charities for a predetermined term. The donor retains control over the remaining assets after the trust term ends. 2. Charitable Lead Unit rust (CLUB): Unlike the FLAT, a PR-IGCLUT distributes a variable annual payment to charities based on a fixed percentage of the trust's value each year. This trust option offers potential growth and income opportunities for the donor while supporting charitable causes. Both FLAT and CLUB have their unique benefits and considerations. Donors must carefully evaluate their financial goals, charitable intent, and risk tolerance to determine which structure suits their specific needs. Key Features and Benefits of Puerto Rico Inter Vivos Granter Charitable Lead Annuity Trusts: 1. Charitable Impact: PR-IGCLAT allows individuals to support charitable organizations or causes that align with their values, making a positive impact on society. 2. Tax Efficiency: By creating a PR-IGCLAT, individuals may receive income, estate, and gift tax deductions for the charitable gifts made during their lifetime. 3. Asset Protection: Assets transferred to a PR-IGCLAT may be protected from potential creditors or legal claims. 4. Control over Assets: The granter retains the ability to manage and control the assets within the trust during their lifetime, ensuring flexibility and security. 5. Legacy Preservation: Setting up a PR-IGCLAT enables individuals to leave a lasting legacy by supporting charitable causes even after their lifetime. It is crucial for individuals interested in creating a Puerto Rico Inter Vivos Granter Charitable Lead Annuity Trust to consult with legal and financial professionals experienced in estate planning and charitable giving. They can assess individual circumstances, provide specific guidance, and help create a tailored trust structure that meets their philanthropic and financial objectives.
