Charitable Gift Annuities
Eunice and Joe had been married for forty-one years. Before Joe passed away, he and Eunice had decided that they no longer wanted to deal with the condominium that had belonged to Joe's mother that they had been renting out in the years since she had died.
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After they sold it, they began to explore their options regarding the proceeds from the sale. They met with their tax advisor and she suggested they consider a charitable gift annuity. Since they had volunteered at the hospital in the past, they decided to contact the Development Office and see what it would mean to the hospital and to them.
Eunice:
We met with our tax advisor and looked at the idea. When I saw the income we
would have for the rest of both of our lives and compared to what we were receiving
in rent, I was amazed! Plus there were tax benefits that helped us immediately.
And now, I don't have to do a thing - it's all taken care of.
The development officer explained how they could use our support and what it meant to them. He talked about the children and what their needs were and what they were hoping to do in the future. It was something Joe and I did together, and I'm really, really happy we did."
A charitable gift annuity can provide tax benefits now and a lifetime income for the donor and a beneficiary if desired. Perhaps also it brought peace of mind to Joe knowing that Eunice would have the resources she needed if he was no longer there.
A deferred gift annuity is a variation on a gift annuity. A gift is made and the charitable organization promises in return to pay you an income stream that begins on a future date you specify. Since the payments do not begin for a period of time, the fund will grow without withdrawals until the payments begin. With more money in the fund once payments begin, the payments will be larger than with a comparably-sized immediate annuity.
An attractive benefit of this arrangement is that it enables a donor to make a gift now and take a charitable income tax deduction now while in a high tax bracket. Income may be deferred, for instance, until after retirement, when the rate of tax will presumably be lower. Deferred gift annuities are creative ways to delay income to pay for children's or grandchildren's college expenses, supplement your retirement income, or assist with assisted-care living arrangements that may be inevitable.
A part of each payment, as in any gift annuity, will be tax-free for a period of years. However, the precise amount of each payment will depend on the tax rules in effect when the payments start. Deferred and gift annuity payments cannot begin until one year from the gift date.
Charitable gift annuities are the gifts that keep on giving. Please contact us for an illustration of how your gift can produce income for life.
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Revised: September 10, 2003 14:25.