Gifts that provide lifetime income for donors
There are many sophisticated Life Income Gift Vehicles available to donors through The Foundation of the Diocese of Raleigh as authorized by the Internal Revenue Code. The specific gift vehicle selected by the donor with respective tax advantages should always be based upon the donor’s charitable desire and per advice of their financial advisor. The following represents two simple examples.
A Charitable Gift Annuity is a contract between a donor and the Foundation. The donor makes a gift to the Foundation which agrees to pay a specified income to the donor for life. It is legally binding and is payable from the general assets of the Foundation. The payout rates for a “Single Life Annuity” or “Two Life Annuity” agreement do not exceed those suggested by the American Council on Gift Annuities as updated on their website, http://www.acga-web.org . The payout rates range from 4 percent to 9 percent depending upon the annuitant’s age.
A Charitable Remainder Trust is a trust designed to pay an annual income to one or more individuals for a term of years or for the lives of those individuals in an amount equal to a fixed percentage OR fixed dollar amount of the value of trust assets. The amount of each payment to the beneficiaries may vary based on fluctuations in the value of the trust as determined on an annual basis. Upon the death of the beneficiaries, the assets of the trust are transferred to the Foundation for the charitable purposes specified by the donor. The minimum payout rate to the individual(s) is 5 percent by law.
- Ability to make a major gift supporting a diocesan ministry while receiving a lifetime income stream.
- Receive an immediate tax deduction (and partial avoidance of capital gains tax) to secure a future gift.
- Opportunity to provide a lifetime income to themselves or a loved one.
- Ability to ‘double their assets’ by purchasing a life insurance instrument with a portion of the income stream to allowing them to give to charity, receive a lifetime income, and support their heirs.
- Flexibility to determine how a donor’s favorite charity will endure beyond their lifetime.