Mid-America Planned Giving Council

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Charitable Lead Annuity Trust Planning: Two Strategies for a “Zeroed Out” CLAT with Lathrop & Gage

Download 11-13-15 CLAT Presentation

Note: MO Bar CLE 1.2 hours | KS Bar CLE 1.0 hours

A Charitable Lead Annuity Trust (“CLAT”) is an effective estate planning tool to fund a family’s charitable desires while passing assets to the family at the end of the CLAT term free of gift tax or estate tax.

One strategy funds a zeroed out CLAT with preferred units of a Limited Liability Company.  The preferred units have a coupon rate (such as 7.5%) determined by a qualified appraiser, which generates annual cash flow to the CLAT.  The annual annuity payment from the CLAT to the family charity equals the preferred dividend distribution.  At the end of the charitable term, the preferred units pass to a family trust free of transfer tax.

A second CLAT strategy is used at death to pass business interests to family trusts without transfer tax and cash and a promissory note to the zeroed out CLAT.  The family trust buys the business interests from the decedent’s estate for cash and a note.  The decedent’s estate plan transfers the cash and promissory note to the zeroed out CLAT.Lathrop-&-Gage

 

 

 

 

 


Jim Betterman:  
As the Co-Leader of Lathrop & Gage’s Wealth Strategies practice, Jim Betterman focuses his practice on trust and estate planning. He regularly counsels high net worth families and their family offices on complicated matters. Mr. Betterman guides owners of closely held businesses through succession planning as well as tax planning.  He has actively engaged in charitable planning including the creation and funding of substantial supporting organizations and private foundations, as well as charitable remainder trusts, charitable lead trusts and charitable gift annuities. He is actively involved in the settlement and litigation of trust and estate disputes among family members, trustees and beneficiaries. Mr. Betterman has been selected for Missouri/Kansas Super Lawyers, 2006-2014, and among The Best Lawyers in America®, 2005 – 2015.  He is a Fellow of the American College of Trust and Estate Counsel (ACTEC).

Joe Growney:   Joe Growney concentrates his practice in all areas of estate planning, including the preparation of basic and complex estate planning documents, and the implementation of sophisticated planning techniques. He also assists high net worth individuals and closely-held businesses with business succession planning and tax planning, including the formation of corporations, partnerships and limited liability companies, and structuring of corporate reorganizations and recapitalizations. Mr. Growney regularly assists clients with life insurance planning, charitable planning and estate planning with retirement benefits.

Courtney Conrad:  Courtney Conrad focuses her practice in the area of estates and trusts law. She has experience in basic estate planning and sophisticated estate planning, as well as tax planning for high net worth individuals. Ms. Conrad assists clients with charitable planning, including the formation and administration of charitable entities and trusts. She also has experience in wealth preservation and business succession planning, as well as estate and trust administration


Member Quotes

Friday, May 11, 7:30 – 9:00 a.m.

Rockhurst University, Conway Hall, Room 103


Tom Cullinan
, JD – Editor, Planned Giving Today;  President, Schola Donum, Inc., Omaha, NE

 TODAY’S GATEWAY GIFTS

Donors face uncertainties due to investment volatility and scheduled changes in the federal tax rates, making planning even harder than it was two years ago. At the same time, among life income gifts CRTs and PIFs have become an endangered species, and even the charitable deduction is under attack. How can charities adjust their marketing and communications plans in the face of all this? How can advisers counsel their clients? We’ll look at gifts that actually work in today’s economy.

PPP Tracks:  Marketing – Tools and techniques for identifying donors and inspiring them to make charitable gifts; Gift Design Essentials – Best practices for structuring gifts that benefit both donors and charitable organizations.

Tom Cullinan is an Executive Consultant with O’Meara, Ferguson, Whelan, and Conway in its Mission Advancement Services division. The firm delivers strategic financial development counsel, stewardship education, capital financing, and investment management services to Catholic dioceses, religious institutes, schools, and universities. Previously, he was an independent charitable gift planner with offices in Omaha, Neb. and Corpus Christi, Texas, providing counsel to not-for-profit organizations and generous donors. As a consultant and front-line higher education development manager, he has facilitated gifts having a cumulative value exceeding $950 million.

Cullinan is also editor of Planned Giving Today®, a monthly publication serving the charitable gift-planning community. As editor, he is responsible for content that helps gift-planners enable others to give generously and prudently.

He was named to the Partnership of Philanthropic Planning’s Leadership Institute in 2011, one of the first 31 charitable gift planners in the 10,000-member international association selected through a peer review process. He was director of the College of William & Mary National Planned Giving Institute for four years and a member of its faculty for 11 years. He served a three-year term on the board of the Partnership for Philanthropic Planning and has been active in its local affiliates in Baltimore, Houston, Nebraska, and Washington D.C. He earned degrees in business and law from the University of Nebraska-Lincoln.

 


JT Cattle Director of Development, Avila University