Estate Planning Missed Questions

Question 1

Trevor had rapidly appreciating, income-producing assets and was interested in making annual contributions to a qualified charity using a trust. At the end of the trust term, he wanted the trust corpus to transfer to his brother, Noah. The annualized Consumer Price Index (CPI) is 2.0%.

Which of the following trusts should Trevor select to generate the charity income stream and maximize value of the assets transferred to Noah?

• CLUT
• CRAT
• CLAT
• CRUT

Answer 1

A CLAT is the best Charitable Lead Trust (CLT) choice when interest rates are lower since smaller annuity payments to a charity result in a greater value of the trust corpus for the remaindermen.