A Virginia Charitable Remainder Inter Vivos Annuity Trust (CAT) is a legal and financial tool used by individuals in Virginia to support charitable causes while also receiving income during their lifetime. A CAT is a type of irrevocable trust where an individual, known as the donor, transfers assets such as cash, securities, or real estate to the trust. The donor then receives a fixed annual annuity payment from the trust for a specified period or until their passing. After the donor's death or the end of the specified period, the remaining assets in the trust are distributed to one or more charitable organizations designated by the donor. This type of trust offers numerous benefits, including the ability to reduce income and estate taxes, provide income for life, and support philanthropic causes. Virginia law provides specific guidelines and requirements for Cats, ensuring that they comply with state regulations. There are several types of Virginia Charitable Remainder Inter Vivos Annuity Trusts: 1. Standard CAT: This is the most common type of CAT, where the donor receives a fixed annuity payment for life or a specific term. The annuity payment is calculated based on a predetermined percentage of the initial fair market value of the trust assets. 2. Flip CAT: This variation allows the donor to receive a lower annuity payment initially, and once certain predetermined conditions occur, the annuity payment "flips" to a higher amount. The conditions for the flip can be based on factors such as the sale of a property, reaching a certain age, or any other predetermined event. 3. Net Income CAT: In this type of CAT, the annuity payment is based on the trust's net income for the year, rather than a fixed percentage of the initial trust assets. If the trust's net income is less than the specified annuity payment, the shortfall can be made up in future years. 4. Net Income with Makeup CAT: Similar to the Net Income CAT, this type allows for makeup payments in future years if the trust's net income in a particular year falls short of the annuity payment. This provision ensures that the donor receives the specified annuity amount over the trust's term. Virginia Charitable Remainder Inter Vivos Annuity Trusts offer residents of Virginia a flexible and effective vehicle to support charitable causes while enjoying financial benefits. It is important to consult with legal and financial professionals to determine the best type of CAT based on individual circumstances and philanthropic goals.