 Helpful Articles
from David Vollrath,
Union County Foundation Executive Director
The Foundation encourages you to work closely with your professional advisor(s)
as you develop your estate plan and consider your present and future charitable goals. |
What is a “charitable gift annuity” and what can it do for me??
(Part of a series of articles on charitable giving and the Union County Foundation
by David Vollrath - Exec. Dir.)
An increasingly popular way to receive lifetime income and support your favorite charity(s)
is through a charitable gift annuity. A charitable gift annuity is an agreement between an individual and a qualified
charitable organization such as the Union County Foundation. Under this type of agreement a donor transfers cash
or other assets of value to the Union County Foundation and in return receives fixed quarterly income for the rest
of his or her lifetime. A charitable gift annuity may be payable to one annuitant for life or upon death to a second
annuitant for life. Typically the joint annuity would be based on both a husband and wife. Upon the death of the
annuitant(s) the specified charity(s) receives the remainder of the donor's original gift. Usually this is around
50% of the original gift. Uniquely the Union County Foundation permits the annuitant to name a local charity(s)
of his/her choice to be the eventual beneficiary. The beneficiary could be your church, fraternal organization,
YMCA, Hospital, etc. This is consistent with our goal of promoting charitable giving in Union County.
The fixed rate of interest paid out to the annuitant(s) is based on the age of the donor(s). For example a donor
age 64 will receive lifetime quarterly checks based on a rate of 6.0 %, a donor age 75 will receive lifetime quarterly
checks based on a rate of 7. 1 % and a donor age 80 will earn 8% for life. During the annuitant(s) projected life
span, a significant portion of the quarterly income received is tax-free as is a significant portion of the original
gift annuity. As you can see a charitable gift annuity not only pays you a rate of return much higher then available
on certificates of deposit but it offers you tax savings and an opportunity to leave a legacy to the charity(s)
of your choice. This truly is a win/win situation!
The following are some commonly asked questions regarding charitable gift annuities. Do the quarterly payments
I receive change over time? No, the interest rate on the quarterly checks you receive is set and fixed when
your annuity begins. The quarterly payments you receive will not be lowered, cancelled, delayed, or suspended regardless
of the stock market or the national economy. Can I change the beneficiary(s) over time? Yes, with a notarized
change of beneficiary form you can change the beneficiary. Will the quarterly payment I receive change if the
annuity is written on two lives rather than just one? Yes, since the period of their combined life expectancies
is typically longer than one person's life expectancy the rate of payment will be somewhat lower. Payments for
two life annuities are available upon request. Will my charitable gift annuities be part of my estate? No,
charitable gift annuities are not part of your estate, therefore you avoid estate taxes and probate costs.
If you are looking to maximize your current income and desire to ultimately leave a legacy to a charitable Union
County organization then a charitable gift annuity is an investment tool you should consider. Call us at 642-9618,
email us, or stop by our Marysville office at 126 N. Main St for additional information and for a personalized
free annuity quote. We will help you... preserve your footprint in time. |
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