Super CLAT

A Nongrantor Charitable Lead Annuity Trust (CLAT) is one of many variations of a Charitable Lead Trust. Generally, a CLAT is an irrevocable trust designed to make periodic distributions to charity for a period of years. At the end of the term, the assets in the trust (the remainder interest) are distributed to beneficiaries selected by the donor, usually the donor’s children. The donor establishes the amount of income and the time period over which the charity will receive distributions from the trust. This amount distributed to charity annually is fixed and will not change regardless of the investment performance of the assets in the trust. The donor does not receive a charitable income tax deduction. Instead, the donor receives a charitable gift tax deduction equal to the present value of the charitable distributions. This deduction serves to reduce the taxable gift value of the remainder interests.