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.
Vermont Inter Vivos Granter Charitable Lead Annuity Trust (VIGILANT) is a legal arrangement established in the state of Vermont that allows individuals to make charitable donations while still retaining some control and benefits from the trust assets. This type of trust has several types, including the Non-Grantor Charitable Lead Annuity Trust (NG LAT), the Granter Charitable Lead Annuity Trust (FLAT), and the Charitable Lead Unit rust (CLUB). The VIGILANT serves as a powerful estate planning tool for individuals who wish to support charitable causes during their lifetime and mitigate potential estate tax implications. As a donor, you transfer assets into the trust, and during its predetermined term, a fixed annuity payment is made to one or more charitable organizations. Once the trust term ends, the remaining assets are distributed to designated beneficiaries, typically family members or other individuals. The Non-Grantor Charitable Lead Annuity Trust (NG LAT) is a type of VIGILANT in which the donor contributes assets but does not receive any income tax deductions. Instead, the trust's income is subject to income tax. This type of trust is often favored by individuals who have already maximized their income tax deductions or anticipate high estate tax liabilities. On the other hand, the Granter Charitable Lead Annuity Trust (FLAT) allows the donor to receive income tax deductions for the present value of the annuity payments made to the charitable beneficiaries during the trust's term. This deduction can help reduce the donor's income tax liabilities. Lastly, the Charitable Lead Unit rust (CLUB) is another type of Vermont Inter Vivos Granter Charitable Lead Annuity Trust that provides the donor with more flexibility. Unlike the other types, the annuity payment to the charitable organizations is a fixed percentage of the trust assets' value, which is revalued annually. This means that if the trust assets appreciate in value, the charitable payments increase accordingly. In conclusion, the Vermont Inter Vivos Granter Charitable Lead Annuity Trust offers several options for individuals seeking to support charitable causes while maintaining control over their assets. The NG LAT, FLAT, and CLUB are different variations of this trust, allowing donors to choose the one that aligns best with their financial goals and tax planning strategies. Seeking professional advice from attorneys and financial advisors is advisable when considering creating a Vermont Inter Vivos Granter Charitable Lead Annuity Trust.
