Gerry Nowatny reports about the benefits of owning life insurance within a cascading charitable lead annuity trust (“CLAT”). His article begins as follows:
In order for the taxpayer to receive a deduction for the contribution to a CLAT, the CLAT must be a grantor trust Since the CLAT is treated as a grantor trust, i.e. the income is taxed to the taxpayer, life insurance and its tax advantages make it an excellent investment vehicle within the CLAT.
This article explores the idea of creating a series of CLATS over several years to fund a permanent life insurance contract on a non-MEC basis.