Charitable Gift Annuity
Guarantee income for life while also leaving a charitable legacy
A charitable gift annuity is a way for you to receive a guaranteed income for life and an immediate income tax deduction, while at the same time, leaving a charitable legacy.
Through a charitable gift annuity, you receive a fixed stream of income for life. After paying the lifetime annuity to you and your spouse, the remaining principal will be used by Communities Foundation of Texas (CFT) to benefit the community or is transferred to your named charitable fund to accomplish your specific charitable goals.
How to establish a Charitable Gift Annuity
In exchange for your charitable gift, CFT agrees to make fixed payments for life to one or two annuitants. The size of the payment is determined at the time the gift is made and will not fluctuate with the market. We establish gift annuities in amounts of $10,000 and greater.
If you choose to defer payments for longer than a year you can take a larger immediate charitable income tax deduction and receive a higher payout once payments begin.
When you contribute to a gift annuity, you decide which charitable organization or cause your gift annuity contribution will ultimately support.
You receive an immediate income tax charitable deduction for a portion of your gift, and this deduction can be taken over as many as six consecutive tax years. If your gift is funded with appreciated assets, you normally have a reduction in capital gains tax as well.
Difference between a charitable remainder annuity trust and a charitable gift annuity
In the annuity trust, payments are required only as long as the trust has sufficient assets to make them. In the charitable gift annuity, payments are backed by all of CFT’s assets, not solely your gift. Setting the payments, the charitable deduction, taxation of payments, and capital gain implication also differ. The same Treasury tables and methodology, however, are used for both plans when computing the income tax charitable deduction.
Geri Jacobs, ChFC, CLU
Director of Charitable Gift Planning
Contact me to explore creating a charitable gift annuity.
|“We make a living by what we get, but we make a life by what we give.”