Charitable Gift Annuity – A Planner’s
Perspective
(from the Spring 2000 DCF Newsletter)
A Charitable Gift Annuity, one of the oldest types
of planned gifts, is a contractual agreement between a donor and
charity. Under the agreement, the donor transfers assets to the
charity and receives stable income payments for life (for the donor
and/or another person). Ultimately, the charity receives the gift.
“For a donor who likes the security of a fixed
income payment, the gift annuity can have great appeal,” according
to Mary Hickok, an estate planning attorney with Wilmington Trust
Company and a member of the DCF's Planned Giving Committee. “It
provides multiple benefits. The donor takes an immediate income tax
charitable deduction based on the value of the transferred assets
and the annuitant's age. Then, the annuitant receives guaranteed
annual income, paid in quarterly installments, some of which is
tax-free or tax preferred.”
The minimum gift annuity level at the DCF is
$10,000. “This initial investment is lower than most life income
gifts,” noted Ms. Hickok. “And setting up a gift annuity is a
relatively simple transaction.”
The DCF's gift annuity program is an asset to
Delaware's charitable community. According to Mary Hickok, “A small
charity that is unable to administer gift annuities itself can now
look to the DCF for help. It's also very helpful for the estate
planning community to have the DCF as a resource for any client
considering a gift annuity.”
To learn more about how a gift annuity can help you
achieve your charitable goals, please contact the DCF Planned Giving
Department at 571-8004.
Sample Gift Annuity Benefits
For an Initial Contribution of $50,000
|
Annuitant’s Age |
70 |
75 |
80 |
|
Charitable deduction |
$20,232 |
$21,938 |
$23,848 |
|
Annual income |
$3,750 |
$4,100 |
$4,600 |
For illustration purposes only. Actual
benefits many vary depending on the timing of the gift.
|
