Charitable Lead Annuity Trust (CLAT) Template

What Is the Charitable Lead Annuity Trust Template?

This trust agreement flips traditional wealth transfer upside down. Instead of receiving income now and giving charity later, your trust pays a fixed dollar amount to charity each year for a set period. When that period ends, whatever remains passes to your designated beneficiaries—typically your children—without additional transfer tax. If trust assets grow faster than IRS assumptions, your heirs receive the excess appreciation completely tax-free.

The "annuity" component means the charitable payment amount is locked in at creation and never changes regardless of trust performance. You fund the trust once, charity receives predictable payments throughout the term, and remainder beneficiaries inherit whatever's left. This structure works particularly well when you expect strong long-term asset appreciation and can afford to tie up capital for 10-25 years while charity receives the income stream.

 

 

Is This Charitable Lead Annuity Trust Right for You?

You need this agreement if you're:

• Transferring wealth to children while minimizing gift taxes
• Supporting charity now rather than through your estate
• Holding highly appreciating assets you expect to grow significantly
• Seeking substantial current income tax charitable deductions
• Creating a legacy combining philanthropy with family wealth transfer
• Looking to freeze asset values for transfer tax purposes

You definitely need this agreement if:

• You're facing large capital gains from business sale proceeds
• Your estate exceeds transfer tax exemption thresholds
• Assets appreciate faster than the IRS discount rate assumptions
• You want to zero out taxable gifts to the next generation
• You're comfortable not accessing these funds for decades

 

 

Why Thousands Trust Legal GPS Templates

Save Money. Estate planning attorneys charge $5,000-$15,000 to draft a CLAT. Our template costs $35.

Save Time. Get your trust agreement immediately after purchase rather than waiting weeks for attorney drafts and revisions.

Look Professional. Banks and financial institutions accept our attorney-quality format without questions or delays.

Keeps You Out of Court. Comprehensive provisions covering annuity payment mechanics, trustee succession, remainder beneficiary protections, and IRS compliance requirements prevent disputes that derail wealth transfer plans.

 

 

 

Get Protected in 3 Simple Steps

Step 1: Secure Checkout. Complete your purchase through our encrypted payment system. Your template downloads immediately.

Step 2: Instant Download. Receive your attorney-drafted CLAT template in Microsoft Word format, ready for customization to your specific charitable goals and family structure.

Step 3: Fill In the Highlighted Fields. Follow the bracketed guidance to set your annuity amount, select charitable beneficiaries, name remainder beneficiaries, choose tax classification, and customize administrative provisions.

 

Frequently Asked Questions

Can I use this template multiple times?

Yes. Your purchase includes unlimited use rights. Create CLATs for different asset pools, separate family branches, or updated versions as your wealth transfer strategy evolves.

Is this contract legally binding?

Yes. This attorney-drafted template meets all legal requirements for valid charitable lead annuity trusts under federal tax law and state trust law. Courts and financial institutions regularly accept these trust structures.

Can I change the charitable beneficiary later?

Limited circumstances only. The template permits substitution if a designated charity loses tax-exempt status or ceases operations, but you cannot change charities simply because your philanthropic priorities shift. Structure this decision carefully at creation.

What happens if trust assets don't cover the annuity payment?

The trustee distributes all available assets to charity but has no obligation beyond that. Remainder beneficiaries aren't liable for shortfalls. This protects your heirs but means conservative annuity-setting is critical for your charitable intent.

Do I need a separate trustee or can I serve myself?

You can serve initially but consider succession for long payment periods. A 20-year CLAT likely needs multiple trustees. The template includes comprehensive trustee succession provisions and optional professional trustee language for institutional continuity.

How does this compare to a charitable remainder trust?

Charitable remainder trusts pay income to you or beneficiaries first, with charity receiving what's left at termination. CLATs do the opposite—charity gets income first, your heirs get the remainder. Use CLATs when your goal is tax-efficient wealth transfer rather than personal income stream.