The "safe-harbor" sample trusts, alternate provisions, and annotations published by the IRS for charitable lead annuity trusts
and unitrusts can be found in Rev.
The partition of a charitable lead annuity trust
into three separate trusts to address differences of opinion among trustees as to the choice of charitable beneficiaries and the investment of trust assets did not cause the original trust, the new trusts, or any of the trusts' beneficiaries to realize income or gain.
Options generally used to reduce estate and gift taxes are the charitable lead annuity trust
and the charitable lead unitrust.
This article also focuses on a relatively new planning device called the increasing payment charitable lead annuity trust
5 CHARITABLE LEAD ANNUITY TRUST
(Term Certain) Transfer to Trust: $1,000,000 Term of Years: 20 Payments: End of Period Check Exhaustion of Trust Fund Ann.
This is and other strategies explored in my January feature -- the charitable lead annuity trust
, gifts of life insurance policies, donor-advised funds, among others -- can effectively realize planning objectives.
A charitable lead annuity trust
(CLAT) may be established as an inter vivos trust during the grantor's life or as a testamentary trust that is created upon the grantor's death.
A charitable lead trust can be categorized as either a charitable lead annuity trust
(CLAT) or a charitable lead unitrust (CLUT).
Other techniques favored in the current low interest rate environment include the intentionally defective grantor trust and, for the philanthropically inclined, the charitable lead annuity trust
The decedent's will provided that if the daughter disclaimed any portion of the bequest, 75% of the disclaimed portion would go to a charitable lead annuity trust
(CLAT) (the annuity interest passing to the family foundation and the remainder interest passing to the daughter, if living at the end of the annuity term) and 25% would go to the family foundation outright.
In brief, a donor would establish a substantial charitable lead annuity trust
(see details at Chapter 14) which would provide income to charity for the life of the annuitant, with the principal passing to the donor's heirs at the termination of the trust.