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.
A Virginia Inter Vivos Granter Charitable Lead Annuity Trust is a type of irrevocable trust established by an individual during their lifetime to support charitable organizations while potentially benefiting the trust's beneficiaries. This arrangement allows the granter to transfer assets into the trust, generate income for charitable purposes, and possibly receive tax benefits. The Virginia Inter Vivos Granter Charitable Lead Annuity Trust is specifically designed for individuals residing in Virginia, and it adheres to the laws and regulations of the state. This trust contains specific provisions that outline how the trust assets will be distributed for charitable causes and potentially benefit the granter's chosen beneficiaries. There are several types of Virginia Inter Vivos Granter Charitable Lead Annuity Trusts, each with its own unique features. These variations include: 1. Non-Grantor Charitable Lead Annuity Trust: This type of trust allows the granter to take an immediate income tax deduction for the present value of the charitable payments made during the trust's term. However, the granter does not receive any income tax benefits during the trust's existence. 2. Granter Charitable Lead Unit rust: In this type of trust, the granter retains interest in the assets and receives an income tax deduction for the present value of the charitable payments. The granter, or a beneficiary designated by the granter, receives an annual payment based on a fixed percentage of the trust's value. 3. Non-Grantor Charitable Lead Unit rust: Unlike the Granter Charitable Lead Unit rust, this variation does not provide income tax deductions for the granter. Instead, the trust is taxed as a separate entity, and the assets are distributed to charity during the trust's existence. 4. Flip Charitable Lead Annuity Trust: With this type of trust, the trust converts from a charitable lead trust to a non-charitable lead trust based on a specific occurrence or event. For instance, it may change to a trust providing for family members after a certain number of years or upon the death of the granter. Overall, the Virginia Inter Vivos Granter Charitable Lead Annuity Trust serves as a powerful tool for individuals looking to support charitable causes while potentially gaining tax advantages for themselves or their beneficiaries. This trust structure enables donors to leave a lasting impact on their community and fulfill their philanthropic goals.
