Life Income Gifts
A Life Income Gift is a contract between you and the
Delaware Community Foundation which gives you the opportunity to
make charitable gifts and provides you with a stream of income for
life. It has components of both a charitable gift and a financial
investment. You can take care of your primary financial
responsibilities, satisfy philanthropic goals and avoid or
significantly reduce your tax burden.
Life Income Gifts make payments to you and/or other
beneficiaries for life. Upon your death or the death of other
beneficiaries, the remaining trust assets pass to the Delaware
Community Foundation.
The two most common types of life income gifts are
Charitable Gift Annuities and Charitable Remainder Trusts. Contact
your professional advisor or Jane Vincent, Senior Vice President for
Development, at 302/504-5237
or jvincent@delcf.org or additional information.
Charitable Gift Annuity
You enter into a contract with the Delaware
Community Foundation whereby you transfer assets, cash or securities
to the Foundation and the Foundation pays you a fixed and guaranteed
payment (monthly, quarterly, semi-annually or annually) for the
remainder of your life. The amount of the lifetime payment is based
on annuity rates published by the National Committee on Gift
Annuities. Upon death, the remaining principal is retained by the
Foundation to carry out your charitable intentions.
Your tax consequences depend upon your age, the
number of annuitants, the relationship of the annuitant(s), the type
of property being transferred, and other considerations. The assets
of the Delaware Community Foundation stand behind the guaranteed
fixed annual payment. Contact your attorney or other professional
advisor for specific advice.
Types of Charitable Gift Annuities
Immediate – As described above.
Deferred - You establish a commitment to the
community now by transferring assets to the Foundation and you defer
the receipt of income. The community benefits from the interest
earned on the transferred property during the period that payments
are not being made. The charitable gift portion of the deferred gift
annuity contract is larger, thus increasing the size of your
charitable deduction.
See
Planning a “Smart” Gift to Charity
See
Charitable Gift Annuity – A Planner’s Perspective
Charitable Remainder Trust
You can fund a Charitable Remainder Trust with cash,
or, ideally, with long-term appreciated securities. You are allowed
a charitable income tax deduction based on the fair market value of
the asset; the pay-out rate (or annuity amount); the number of
individual beneficiaries; and the age of the beneficiaries. Contact
your tax, legal or financial planning advisor for help in assessing
the options best suited to you situation.
Types of Charitable Remainder Trusts
Charitable Remainder Unitrust - Pays a
variable amount based on a fixed percentage of the annual valuation
of the assets.
Charitable Annuity Trust - Pays a fixed
amount annually until the death of the income beneficiary.
See
Giving: A Family Matter for Gail and Don Greene
See
A
Planner's Perspective: Charitable Remainder Trusts
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