Charitable Gift Annuities|
A Gift that Benefits Both You and Your Favorite Charity|
More and more people are discovering the surprising benefits of making charitable gifts in the form of gift annuities.
A gift annuity offers you a high rate of current income for the rest of your life (See rate chart)
and a way to support charity in Union County. Benefits include:
- lifetime fixed income
- tax savings
- eventual support to your favorite charity(s)
The gift annuity meets the needs of many who wish to give but want to make certain they have first provided for their financial needs and the needs of their loved ones.
If you feel you pay too much of your income towards taxes, a charitable gift annuity may help you reduce your tax liability.
Download Annuity Q & A Brochure.
Answers to Frequently Asked Questions about Gift Annuities|
Q: What is a gift annuity?
A: A gift annuity is an agreement between an individual and a qualified charitable
organization or institution. The donor transfers assets to the organization and receives fixed income payments
for the rest of his or her lifetime and/or the lifetime of another person, if desired. Upon the death of the annuitant
the specified charity(s) receives the remainder (usually about 50%) of the donor's original gift. This remainder
comprises the charitable gift component of the annuity.
Q: Are there tax benefits?
A: Yes. Since a portion of your gift will be used for charitable purposes,
you are entitled to a federal (and perhaps state) income tax deduction in the year you make your gift. Also, part
of each payment you receive is tax-free for a period of years.
Q: What determines the size of each payment?
A: The main factors are the amount you place in the gift annuity initially
and the ages of the annuitants at the time the annuity is created.
Q: Why does my age affect the rate of payment
A: Part of the amount you transfer is returned to you over your life expectancy, and life expectancy changes
with age. Specifically, the older you are when your gift annuity begins, the higher your rate of interest income.
Q: Does that mean the payments I receive
change from year to year?
A: Not your payments on a particular gift annuity agreement. The rate is set and fixed when your annuity begins.
But if you set up additional gift annuities, as many people do, the rate and payments will generally be different
(often higher) for each agreement made in subsequent years.
Q: Can I outlive my payments?
A: One of the attractive features of the gift annuity is that you cannot outlive its benefits. The charitable
recipient is obligated to make payments for as long as an annuitant (a recipient of payments) lives.
Q: Are the payments affected by stock market fluctuations?
A: No, they cannot be lowered, canceled, delayed, or suspended, regardless of the stock market or the national
Q: What type and value of gifts are accepted to fund an annuity?
A: Cash or assets (securities etc.) of $5000 or more.
Q: Can I deduct the gift value of the annuity on my federal tax return?
A: Yes, if you itemize deductions, you can deduct the gift portion on your tax return in the year of the gift.
For cash gifts the deduction is up to 50% of adjusted gross income and up to 30% of A.G.I. For gifts of appreciated
Q: Is the payment the same if more than one person receives payments?
A: Not usually. Annuity payments may be made for the lives of as many as
two persons. Since the period of their combined life expectancies is typically longer than one person’s life expectancy,
the rate of payment will be somewhat lower. Payment rates for two-life annuities are available upon request.
Q: Can I give securities rather than Cash to set
up a gift annuity?
A: Yes. Often the tax benefits are even greater if the securities have increased
in value because you may avoid the tax on a portion of the capital gain in the property. If you give a low yielding
asset, you may be able to increase your income, since a gift annuity may pay more.
Q: Can I arrange for a gift annuity through my will?
A: Yes, you can specify in your will that part of your estate be used to create a gift annuity. Many people
do this to ensure supplementary income for a loved one.
Q: Will my gift annuities be part of my estate?
A: No. If payments are made to you only the gift portion goes directly to the charitable recipient, thus avoiding
estate taxes and probate costs.
Q: Do I have to wait until I retire for the payments from a gift annuity to
A: No, the payments are not tied to retirement age.
Q: How can I begin a gift annuity?
A: A gift annuity can be created with a minimum effort. The first step is to request a gift annuity quote/application.
Uniform Gift Annuity Rates|
To determine the size of payments one person will receive, multiply the rate shown below for the person’s age by the $ value of the amount used to create the annuity. For example, a 75 year old creating a $10,000 gift annuity receives 6.2 % or $620 annually for life.
|(Effective July 1, 2018)|
The Union County Foundation|
David A. Vollrath, Executive Director
126 N. Main Street | P.O. Box 608, Marysville, Ohio 43040 | 937.642.9618 |
Hours: Monday - Friday, 9:00 a.m. to 4:30 p.m.