Charitable Lead Annuity Trusts: The Intermediary for any Large Testamentary Gift to a Family Foundation
Charitable Lead Annuity Trusts: The Intermediary for any Large Testamentary Gift to a Family Foundation
A common plan among wealthy individuals is to leave the balance of his or her estate to the family foundation the individual established. While these transfers mitigate estate taxes, they may not eliminate all concerns or tax issues for the family, the family company, or the family foundation.
Through a detailed example, Richard Franklin will illustrate the use of a charitable lead annuity trust (CLAT) as the intermediary for any large testamentary gift to a family foundation. This strategy is better than expected, particularly because Monte Carlo simulations shows that the family’s foundation is left with a larger endowment than if the CLAT is not used, regardless of investment performance. Among other benefits for the surviving family is a possible reinfusion of wealth upon the CLAT termination. Wealthy families that contemplate large charitable transfers upon death will appreciate knowing of this approach.
About Richard Franklin:
Richard Franklin is a member of McArthur Franklin PLLC in Washington, D.C. He focuses on estate planning, trusts and estate administration, and beneficiary and fiduciary representation. He is a member of the District of Columbia and Florida Bars, is a Fellow of the American College of Trust and Estate Counsel, and is Group Vice-Chair of the ABA RPTE Section’s Income and Transfer Tax Planning Group. He serves on the ACTEC Transfer Tax Study Committee. He has spoken at numerous estate planning programs and written on estate planning topics for Actionline, BNA Insights, Estate Planning, Journal of Multistate Taxation and Incentives, Probate & Property, Steve Leimberg’s Newsletters, Tax Notes, The Florida Bar Journal, The Washington Lawyer, Trusts & Estates and the BNA Estates, Gifts & Trust Journal. Richard is a DC Super Lawyer and is ranked in the 2009 - 2014 editions of The Best Lawyers in America as a leading lawyer in the Trusts and Estates category.
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