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 West Virginia Inter Vivos Granter Charitable Lead Annuity Trust (FLAT) is a type of charitable trust established during the granter's lifetime that provides ongoing financial support to charitable organizations while potentially minimizing estate or gift tax obligations. This trust involves a granter, who creates the trust and contributes assets to it, a trustee who manages the trust, and one or more charitable beneficiaries who receive annual payments from the trust. The West Virginia Inter Vivos Granter FLAT is structured as an annuity trust, meaning that the charitable beneficiaries receive fixed annual payments for a specified period of time. These payments can be designated as a specific dollar amount or a predetermined percentage of the trust's initial value known as the annuity amount. The granter decides the duration of the annuity period, which can be for a fixed number of years or for the lifetime of one or more individuals. By establishing a West Virginia Inter Vivos Granter FLAT, the granter receives an immediate income tax deduction based on the present value of the expected charitable payments. This deduction can help reduce the granter's taxable income in the year of contribution. Additionally, any appreciated assets contributed to the trust may be exempt from capital gains tax upon sale, potentially providing further tax savings. It is important to note that there are different types of Class that can be established in West Virginia. One type is the Charitable Lead Unit rust (CLUB), where the charitable beneficiary receives a fixed percentage of the trust's annual value, recalculated each year. Another type is the Non-Grantor Charitable Lead Annuity Trust (NGC LAT), where the granter is not taxed on trust income, but the trust itself is responsible for paying income taxes. In West Virginia, establishing a West Virginia Inter Vivos Granter FLAT can be a strategic estate planning tool for individuals who have philanthropic goals and wish to make charitable contributions during their lifetime while potentially reducing estate or gift tax liabilities. However, it is important to consult with qualified legal and tax professionals to ensure that this type of trust aligns with your specific financial goals and circumstances.A West Virginia Inter Vivos Granter Charitable Lead Annuity Trust (FLAT) is a type of charitable trust established during the granter's lifetime that provides ongoing financial support to charitable organizations while potentially minimizing estate or gift tax obligations. This trust involves a granter, who creates the trust and contributes assets to it, a trustee who manages the trust, and one or more charitable beneficiaries who receive annual payments from the trust. The West Virginia Inter Vivos Granter FLAT is structured as an annuity trust, meaning that the charitable beneficiaries receive fixed annual payments for a specified period of time. These payments can be designated as a specific dollar amount or a predetermined percentage of the trust's initial value known as the annuity amount. The granter decides the duration of the annuity period, which can be for a fixed number of years or for the lifetime of one or more individuals. By establishing a West Virginia Inter Vivos Granter FLAT, the granter receives an immediate income tax deduction based on the present value of the expected charitable payments. This deduction can help reduce the granter's taxable income in the year of contribution. Additionally, any appreciated assets contributed to the trust may be exempt from capital gains tax upon sale, potentially providing further tax savings. It is important to note that there are different types of Class that can be established in West Virginia. One type is the Charitable Lead Unit rust (CLUB), where the charitable beneficiary receives a fixed percentage of the trust's annual value, recalculated each year. Another type is the Non-Grantor Charitable Lead Annuity Trust (NGC LAT), where the granter is not taxed on trust income, but the trust itself is responsible for paying income taxes. In West Virginia, establishing a West Virginia Inter Vivos Granter FLAT can be a strategic estate planning tool for individuals who have philanthropic goals and wish to make charitable contributions during their lifetime while potentially reducing estate or gift tax liabilities. However, it is important to consult with qualified legal and tax professionals to ensure that this type of trust aligns with your specific financial goals and circumstances.
