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Charitable Lead Annuity Trust

Using MCHT’s Charitable Lead Annuity Trust (CLAT) gift plan a donor may transfer assets to future generations, while providing a stream of income to MCHT for a specified term of years. This gift plan is used by those with a large estate who are looking for ways to pass more to heirs. The technical name for the plan is a “non–grantor charitable lead annuity trust.” It is called a “non- grantor trust” because the assets eventually revert to non-charitable beneficiaries other than the grantor (the donor). It is called a “lead” trust because it leads with a stream of income to the charity before the assets revert to the remainder beneficiaries. It is called an “annuity” trust because it provides fixed annual payments to MCHT during the term of the trust.

The main advantage of a CLAT is that the term and the payout rate can be adjusted to reduce or even “zero out” the gift tax owed on assets that will be transferred to heirs. In addition, any appreciation that takes place inside the trust goes tax free as well.

Typically, CLAT gift arrangements are conducted with a gift of $1,000,000 or more.

To request a personal illustration, please contact David Warren, Planned Giving and Major Gifts Officer. All illustrations and conversations will be done on a strictly confidential basis.