Who is an ideal candidate for a Charitable Lead Trust (CLT)? First and foremost, the person must be charitably-inclined. Another obvious factor is that the person has wealth. I mean wealthy from the standpoint that the person does not need the income from the property to be placed in the trust.
What is an ideal asset for a CLT? An asset that will significantly appreciate in value. An asset that is liquid and/or produces enough income to cover the charitable annuity.
Currently, the federal gift tax exclusion amount is $5,000,000. If Congress does nothing, which we know from recent years is a real possibility, the law sunsets on December 31, 2012 and the exclusion amount will drop to $1,000,000. If Congress does act, it is possible (maybe even likely) that the exclusion amount will be lower than $5,000,000. This means that the wealthy may have less than two years to gift significant wealth tax-free.
The automatic extension of time to file a Form 1041 Fiduciary Income Tax Return was recently shortened from six months to five months by the IRS. The amendment to Treasury Reg. Section 1.6081-6T is effective as of June 24, 2011. Of course, the automatic extension to file the return does not extend the payment deadline.
The Ohio Estate Planning, Trust & Probate Law Blog is for educational and recreational purposes only. Regardless of whether you are an existing client of Bradley Wrightsel and Wrightsel & Wrightsel, you should not consider the content of this blog to be legal advice. The use of this blog does not constitute legal advice and does not establish an attorney-client relationship.
In the event that you post a comment on this blog, please do not post offensive, sensitive or confidential information. Comments posted by others do not necessarily convey the opinion of Bradley Wrightsel and Wrightsel & Wrightsel.