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 Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trust is a specific type of trust established by an individual, referred to as the granter, residing in Phoenix, Arizona. This unique trust arrangement allows the granter to make charitable donations during their lifetime, while also providing certain financial benefits. In the case of an Inter Vivos Granter Charitable Lead Annuity Trust, the granter transfers assets into the trust, specifying a charitable organization as the beneficiary. The trust then makes annual payments, referred to as an annuity, to the designated charity for a pre-determined period or until the granter's passing. This trust structure is particularly beneficial for individuals who have a desire to support charitable causes in their community while also reducing their taxable estate. By making regular charitable contributions through the trust, the granter can potentially decrease their estate's overall value, thus reducing the estate tax burden for their heirs. Some potential advantages of a Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trust include: 1. Tax benefits: Contributions made to a qualified charitable organization through the trust are typically tax-deductible, decreasing the granter's current income tax liability. 2. Estate tax reduction: By reducing the value of their taxable estate, the granter can potentially decrease the estate tax that would otherwise be levied upon their passing. 3. Legacy and philanthropy: The trust allows the granter to leave a lasting impact on their community by supporting charitable causes they care about the most. While the core concept remains the same, there may be variations of Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trusts based on specific parameters or objectives. These variations could include: 1. Fixed-Term Charitable Lead Annuity Trust: The trust specifies a fixed term during which the charitable organization receives the annuity payments. Once the term expires, the remaining trust assets can be passed on to the beneficiaries, typically family members of the granter. 2. Flip Charitable Lead Annuity Trust: This trust arrangement allows for a shift in the identity of the primary beneficiary. Initially, the charitable organization receives the annuity payments, but at a predetermined future date or event (such as the passing of the granter's spouse), the remaining assets are redirected to non-charitable beneficiaries. 3. Charitable Lead Unit rust: Unlike an annuity trust that offers fixed annuity payments, a unit rust provides variable payments calculated annually based on a predetermined percentage of the trust's net assets. This trust structure offers the potential for greater payouts to the charitable organization if the trust performs well. Overall, a Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trust provides both financial planning benefits and an avenue for charitable giving, enabling individuals to leave a lasting impact on their community while optimizing their estate planning strategies.A Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trust is a specific type of trust established by an individual, referred to as the granter, residing in Phoenix, Arizona. This unique trust arrangement allows the granter to make charitable donations during their lifetime, while also providing certain financial benefits. In the case of an Inter Vivos Granter Charitable Lead Annuity Trust, the granter transfers assets into the trust, specifying a charitable organization as the beneficiary. The trust then makes annual payments, referred to as an annuity, to the designated charity for a pre-determined period or until the granter's passing. This trust structure is particularly beneficial for individuals who have a desire to support charitable causes in their community while also reducing their taxable estate. By making regular charitable contributions through the trust, the granter can potentially decrease their estate's overall value, thus reducing the estate tax burden for their heirs. Some potential advantages of a Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trust include: 1. Tax benefits: Contributions made to a qualified charitable organization through the trust are typically tax-deductible, decreasing the granter's current income tax liability. 2. Estate tax reduction: By reducing the value of their taxable estate, the granter can potentially decrease the estate tax that would otherwise be levied upon their passing. 3. Legacy and philanthropy: The trust allows the granter to leave a lasting impact on their community by supporting charitable causes they care about the most. While the core concept remains the same, there may be variations of Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trusts based on specific parameters or objectives. These variations could include: 1. Fixed-Term Charitable Lead Annuity Trust: The trust specifies a fixed term during which the charitable organization receives the annuity payments. Once the term expires, the remaining trust assets can be passed on to the beneficiaries, typically family members of the granter. 2. Flip Charitable Lead Annuity Trust: This trust arrangement allows for a shift in the identity of the primary beneficiary. Initially, the charitable organization receives the annuity payments, but at a predetermined future date or event (such as the passing of the granter's spouse), the remaining assets are redirected to non-charitable beneficiaries. 3. Charitable Lead Unit rust: Unlike an annuity trust that offers fixed annuity payments, a unit rust provides variable payments calculated annually based on a predetermined percentage of the trust's net assets. This trust structure offers the potential for greater payouts to the charitable organization if the trust performs well. Overall, a Phoenix Arizona Inter Vivos Granter Charitable Lead Annuity Trust provides both financial planning benefits and an avenue for charitable giving, enabling individuals to leave a lasting impact on their community while optimizing their estate planning strategies.
