Advantages of iCLATs
(a/k/a Reversionary CLTs)
Compared to Traditional
Charitable Lead Trusts

iCLATs are SIMPLER to explain, establish and administer compared to traditional CLTs because their sole focus is to save income taxes - not estate taxes.  CLATs are not only easier for the client (or donor) to understand, but they're also much easier for their respective financial planner, accountant and estate planning attorney to understand as well.  For example, (i) iCLATs will not disrupt the client's existing current estate planning documents, (ii) any new accounts owned by an iCLAT can simply be held and managed by the client's current financial planner; and (iii) since iCLATs are "grantor trusts" for income tax purposes they will not complicate the client's tax filings, rather iCLATs only have to file an "informational" Form 1041 and a Form 5227 with the IRS each year. 

 TAKE A LOOK AT SEVERAL EXAMPLES

Less Time & Expense

With iCLATs, the client or donor can, and almost always does, serve as the sole trustee. This provides a greater level of retained control to the client or donor, in comparison to traditional charitable lead trusts.  This is because the retained control traps of IRC §2036, which are significant concerns with traditional CLTs, are completely irrelevant with iCLATs.  In other words, there are fewer concerns and greater flexibility during the administration of iCLATs compared to traditional CLTs, which is very important a happier client or donor is always a good thing - particularly if something unexpected occurs during the term of an iCLAT. 

  TAKE A LOOK AT SEVERAL EXAMPLES

Simplicity

Greater Control

More Applicable

iCLATs are applicable to many more clients and donors compared to traditional CLTs because iCLATs have absolutely  nothing to do with saving future estate taxes - by design.  iCLATs are used for the sole purpose of saving current income taxes - plain and simple.  Think about it, the vast majority of your clients and donors have to pay income taxes - every single year.  Very few, if any, have to worry about estate taxes because they currently only impact the very wealthiest of high net worth families (the estate tax unified credit exemption amount in 2020 $11,580,000 per person & $23,160,000 per married couple).  Saving current income taxes is almost always a higher priority to clients and donors than saving potential estate taxes in the future.  Therefore, iCLATs will not only be applicable to more of your clients and donors than traditional CLTs, but they will also be of much greater interest to them as well!  

       TAKE A LOOK AT SEVERAL EXAMPLES

Compared to traditional CLTs, iCLATs simply have fewer planning issues for the client or donor to understand and discuss with their attorney, financial planner and/or accountant.  Since the sole purpose of an iCLAT is to save immediate income taxes, it is easier for all involved to determine whether an iCLAT is beneficial or not for the client or donor.  For clients or donors, and for their advisors, time is money, so less time involved always means less expenses.  iCLATs are usually designed, signed and fully funded in less than a month.  Additionally, the Form 5227 and Form 1041 that iCLATs must file with the IRS each year are much easier to prepare compared to those for traditional CLTs.  This results in much lower annual administration costs compared to traditional CLTs.                                                                TAKE A LOOK AT SEVERAL EXAMPLES

GOT A QUESTION?

If you have a question, please send it to us.  We'll get back to you promptly with an answer, usually within 24 hours.  Also, be sure to look at our Frequently Asked Questions (FAQs) page.  Your question may have already been asked by others - and answered.

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Our Founder & President - Brad Gornto provides multiple FREE webinars each month for annual givers, charitable giving professionals and also for allied advisors (accountants, attorneys and financial planners). 

iCLAT ANALYZER TOOL

Perhaps you want to determine if an iCLAT is an appropriate charitable planning tool for you to consider.  If so, the iCLAT Analyzer Tool will help you find out!  The iCLAT Analyzer Tool has 8 simple questions, which will allow us to quickly determine if the iCLAT is right for you, your clients or your charity's donors.

 FREE CUSTOMIZED iCLAT ILLUSTRATION

In under 5 minutes you can provide all the information necessary for our team to create a FREE iCLAT Illustration specifically customized to your particular situation.  Your information may be submitted to us on an anonymous basis.  You will receive your customized iCLAT Illustration within 2 business days. 

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