Life Income Gifts
Life income gifts provide you or your designated beneficiary income for life in exchange for your gift. The most common types of life income gifts are a pooled income fund, a charitable gift annuity, and a charitable remainder trust.
With a Pooled Income Fund, gifts are “pooled” with other gifts and invested in a professionally managed investment portfolio. The donor receives the following benefits:
- A guaranteed income for life. The amount of the income depends on the rate of return on the fund’s investments. The income can also flow to another designated beneficiary.
- An immediate federal income tax deduction. The amount of the deduction is usually based on the age of the donor and/or beneficiaries.
- The elimination of capital gains taxes, if funded through appreciated securities such as stocks, bonds, or mutual funds.
- A possible reduction in estate taxes.
- At the death of the final beneficiary, the property goes to Christ Church.
The benefits of establishing a Charitable
Gift Annuity are similar to that of the pooled income fund with the following differences:
- Usually gift minimum of $5,000
- The income for life is guaranteed at a fixed amount based on actuarial calculations.
- A portion of the gift is deductible.
- A portion of the income received is tax exempt.
A Charitable Remainder Trust can be funded with various types of assets, including real estate. Like the pooled income fund and the charitable gift annuity, the charitable remainder trust provides income for life, an income tax deduction, relief from capital gains taxes (if funded through appreciated property), and a possible reduction in estate taxes.
The income fluctuates based on the performance of the portfolio. If you are seeking fixed income annually, a charitable remainder annuity trust is an option to consider.
The Charitable Lead Trust, another estate planning tool, enables you to transfer assets to a trust that pays its income to Christ Church for a set period of time. At the end of the term, the principal and all capital appreciation returns to you or others that you name.