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 Washington Inter Vivos Granter Charitable Lead Annuity Trust (FLAT) is a type of estate planning tool that allows individuals to make charitable contributions during their lifetime while also benefiting from certain tax advantages. This arrangement provides both philanthropic support to charitable organizations and potential tax savings for the granter. In a Washington Inter Vivos Granter FLAT, the granter transfers assets to a trust, typically funded with cash, securities, or other valuable properties. The trust is structured to generate a fixed annual income, known as an annuity, which is paid to one or more designated charitable organizations for a predetermined period of time. At the end of this period, the remaining trust assets are distributed to designated non-charitable beneficiaries such as family members or other beneficiaries chosen by the granter. One key benefit of a Washington Inter Vivos Granter FLAT is the potential for immediate tax deductions. The granter can deduct from their taxable income the present value of the expected charitable payments to be made by the trust during its term. This deduction can help reduce the granter's taxable income, potentially resulting in significant tax savings. There are different types of Washington Inter Vivos Granter Class available depending on the terms and conditions set forth by the granter. Some common variations include: 1. Charitable Lead Annuity Trust (FLAT): In this type of FLAT, the charitable beneficiary receives a fixed annuity payment each year for the term of the trust. The annuity payment is typically a fixed percentage of the initial fair market value of the trust assets. 2. Charitable Lead Unit rust (CLUB): Unlike a FLAT, a CLUB pays a fixed percentage of the trust assets' fair market value, which is revalued annually. This means that if the trust assets appreciate in value, the annual payment to the charitable beneficiary also increases. 3. Net Income Charitable Lead Annuity Trust (NIC LAT): This type of FLAT makes annual payments to the charitable beneficiaries based on the trust's net income for that year. If the trust's income exceeds the annuity payment amount, the excess income can be accumulated in the trust for future charitable payments. 4. Flip FLAT: A Flip FLAT starts as a non-charitable lead trust, with non-charitable beneficiaries receiving the income for a specified period. At a predetermined "flip" event, such as the death of a non-charitable beneficiary, the trust structure "flips" to become a charitable lead trust, with payments going to the designated charitable beneficiaries. Washington Inter Vivos Granter Class offer individuals an opportunity to give back to charitable causes they care about while potentially reducing their tax liability. It is important to consult with a qualified estate planning professional to understand the specific rules and requirements associated with establishing and maintaining a Washington Inter Vivos Granter FLAT.A Washington Inter Vivos Granter Charitable Lead Annuity Trust (FLAT) is a type of estate planning tool that allows individuals to make charitable contributions during their lifetime while also benefiting from certain tax advantages. This arrangement provides both philanthropic support to charitable organizations and potential tax savings for the granter. In a Washington Inter Vivos Granter FLAT, the granter transfers assets to a trust, typically funded with cash, securities, or other valuable properties. The trust is structured to generate a fixed annual income, known as an annuity, which is paid to one or more designated charitable organizations for a predetermined period of time. At the end of this period, the remaining trust assets are distributed to designated non-charitable beneficiaries such as family members or other beneficiaries chosen by the granter. One key benefit of a Washington Inter Vivos Granter FLAT is the potential for immediate tax deductions. The granter can deduct from their taxable income the present value of the expected charitable payments to be made by the trust during its term. This deduction can help reduce the granter's taxable income, potentially resulting in significant tax savings. There are different types of Washington Inter Vivos Granter Class available depending on the terms and conditions set forth by the granter. Some common variations include: 1. Charitable Lead Annuity Trust (FLAT): In this type of FLAT, the charitable beneficiary receives a fixed annuity payment each year for the term of the trust. The annuity payment is typically a fixed percentage of the initial fair market value of the trust assets. 2. Charitable Lead Unit rust (CLUB): Unlike a FLAT, a CLUB pays a fixed percentage of the trust assets' fair market value, which is revalued annually. This means that if the trust assets appreciate in value, the annual payment to the charitable beneficiary also increases. 3. Net Income Charitable Lead Annuity Trust (NIC LAT): This type of FLAT makes annual payments to the charitable beneficiaries based on the trust's net income for that year. If the trust's income exceeds the annuity payment amount, the excess income can be accumulated in the trust for future charitable payments. 4. Flip FLAT: A Flip FLAT starts as a non-charitable lead trust, with non-charitable beneficiaries receiving the income for a specified period. At a predetermined "flip" event, such as the death of a non-charitable beneficiary, the trust structure "flips" to become a charitable lead trust, with payments going to the designated charitable beneficiaries. Washington Inter Vivos Granter Class offer individuals an opportunity to give back to charitable causes they care about while potentially reducing their tax liability. It is important to consult with a qualified estate planning professional to understand the specific rules and requirements associated with establishing and maintaining a Washington Inter Vivos Granter FLAT.
