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CLAT - Charitable Lead Annuity Trust
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What is a Charitable Lead Annuity Trust

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What is a CLAT

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How a CLAT works

Charitable Lead Annuity Trust -CLAT

A charitable lead annuity trust, aka a CLAT, is a type of charitable lead trust which then makes fixed payments to a designated charity during its lifetime. The payment is in the form of an annuity. At the end of the CLAT’s term, any remaining assets in the trust are passed to beneficiaries or revert to the donor. If the grantor wishes, the trust can also make payments to selected funds from which additional charitable gifts can be distributed according to the grantor or their family’s directions.

A CLAT can be further categorized as a non-grantor or grantor CLAT, depending on its structure. A grantor CLAT is structured such that the donor controls the assets in the trust and gets an immediate income tax deduction for the present value of the annuity stream going to the charity.

On the other hand, a non-grantor CLAT doesn’t provide immediate income tax deduction because it belongs to the trust, not the donor. However, at the end of the CLAT term, the donor can claim charitable deductions based on the value of assets the trust pays them.


Advantages of CLAT arrangements

Donor families can receive a substantial charitable deduction, thus preserving their wealth.
The donor can claim immediate income tax charitable deduction in the case of a grantor CLAT
The owner of a non-grantor CLAT is due for a gift tax charitable deduction determined by the present value of the interest received by the charity.
Are you planning to use gift vehicles in your estate planning?
With an estate planning attorney’s help, you can set up charitable trusts and gifts of annuities.
Charitable giving is a fantastic estate planning tool; these gift vehicles allow you to donate to the charities of your choosing, reduce your tax burdens and receive dependable income for life.

Newport Beach Estate Attorneys Near Me

Hess-Verdon is in Newport Beach. We have 30 years’ experience in estate planning law. We have helped many clients protect their estate, grow their estate, and pass it down to their loved ones through various legal instruments.

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Living Trusts | Irrevocable Trusts

What is an advanced estate plan?

It’s where your estate combines businesses, properties, intellectual property, blended families, and complex family matters. As a trustor/grantor, it’s crucial to have all your i’s dotted and t’s crossed in this litigious environment.  

Now, some people believe it’s ok to search for an “estate planning lawyer near me” and that drafting an estate plan is routine.  With the growth of trust and probate litigation, it’s obvious it’s not.  When it comes to advanced estate planning, a deep-court experienced attorney is always a great choice.  Hess-Verdon leads the way!

Our living trust lawyers use sophisticated estate planning and wealth preservation techniques to assist individuals, families, executives, and owners of closely-held businesses in preserving and protecting their assets and tailor plans to meet each client’s objectives.

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We counsel clients on estate and tax planning, wealth preservation, multi-generational tax and estate planning, asset protection planning, business succession planning, charitable planning, and related legal matters. We assist families in dealing with family legal issues affecting seniors and disabled children or family members with special needs

Charitable Lead Annuity Trust - What Is A Clat

Trust Types

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