Charitable Lead Annuity Trust. A trust in which a fixed dollar amount or a percentage of the initial value of the trust assets is paid to charitable entities for a term of years, after which the trust principal is transferred to designated beneficiaries of the grantor. The charitable interest “leads” the beneficiary's interests in a CLAT.

Charitable Lead Annuity Trust. A charitable lead trust that provides a series of guaranteed fixed payments each year of the trust period. The payment amount does not change over that period.

Charitable Lead Annuity Trust. A charitable lead annuity trust must have a fixed dollar amount distributed at least as often as annually. It does not have to state a dollar amount, but can be based on a percentage of assets as valued at the inception of the trust. A guaranteed annuity need not be the same dollar amount each year. As long as the annuity payments are determinable from the outset, the annuity may vary. What is not permitted is an annuity formula that will produce a variable annuity tied to a fluctuating index.