A Charitable Lead Annuity Trust, or “CLAT,” is one in which designated charitable beneficiaries receive annual payments during the term of the Trust. Upon the termination of the Trust, designated non-charitable beneficiaries receive the remaining assets of the Trust free from the estate or gift taxes which might otherwise apply.
In a CLAT, the owner assigns certain percentages of his/her original charitable donations to be gifted to specific charities, based on original fair market values, every year. Generally, the grantor of a CLAT aims for charitable annuity payments that will equal all or most of the taxable value of the assets in the Trust. In this manner, the grantor can give as many of the remaining assets to his/her beneficiaries as possible, estate-tax-free.
If you are considering this option in creating your Trust, please feel free to contact the attorneys of Bach, Jacobs & Byrne, P.A., highly-skilled in estate planning and high-net-worth tax planning. Call us at (941) 906-1231 to schedule an appointment.
