Life Income Gifts

Charitable Gift Annuities

Charitable gift annuities are popular because they allow you to make a gift to the Trust in exchange for a guaranteed return of income, starting now or in the future. You can fund the annuity with different types of gifts, such as cash, stock or real estate. For receiving the gift, the Trust agrees to pay you a set payment for life based upon the size of the gift, the number and ages of the beneficiaries, the applicable interest rates, and the rates of return as established by the American Council on Gift Annuities.

  • You receive an income tax deduction for your gift.
  • You will receive a set payment for life, and/or the life of your spouse.
  • Part of the payments you receive will be tax-free income.
  • If you fund the gift with securities, you can avoid part of the capital gains tax.

Charitable Remainder Unitrust

You may be concerned about the high cost of capital gains on the sale of an appreciated property. Or, you might have recently sold property and are looking for a way to save on this year’s taxes. A charitable remainder unitrust can provide you with a solution. By placing the assets into a charitable remainder unitrust, you can bypass up to 100% of the capital gains tax while also reducing future estate taxes and receiving income for life, lives, or a term of years. While you receive income from the trust investment, a gift is made to the Trust at the end of the charitable remainder unitrust term.

  • You avoid at least a portion of the capital gains tax.
  • You receive a current income tax deduction.
  • You reduce your estate taxes lessening the burden on your family.

Charitable Lead Trust

A charitable lead trust allows you to support the Trust without permanently giving up any assets. Unlike many gifts where you receive income for a set period of time and the remainder of the asset passes to the charity, a charitable lead trust provides payments to the Trust for a set period of years with the asset either returning to you or your heirs. A charitable lead trust is ideal for someone who is financially comfortable and can forgo earnings from particular assets in exchange for continuing their philanthropy and receiving tax benefits.

When the assets return to you, it is a grantor charitable lead trust. If the assets are passed on to family members, it is a nongrantor charitable lead trust.

  • Grantor Charitable Lead Trust: Ideal for someone who has an influx of income one year and needs an income tax deduction to offset the increased earnings.
    • You receive an income tax deduction in the year of the gift.
    • Since you remain responsible for paying taxes on the income produced during the years the funds are gifted to the Trust, tax free municipal bonds or appreciated stocks can be great assets to place in the charitable lead trust to offset any taxes that are owed.
  • Nongrantor Charitable Lead Trust: Ideal for someone who does not the need the benefit of the asset placed in the charitable lead trust but wants to pass it on to beneficiaries at a later date.
    • You receive a gift or estate tax deduction reducing burdens on beneficiaries.
    • Depending on when the charitable lead trust is established, it can reduce gift or estate taxes.

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