FREQUENTLY
ASKED QUESTIONS
What is a Charitable Annuity?
A charitable annuity is a charitable giving vehicle wherein
an individual, family or corporation makes an irrevocable,
tax-deductible contribution of personal assets to a charity.
The charity then purchases an immediate life only annuity
from a life insurance company. That annuity contract will
make the lifetime income payments to the donor or donors for
their lifetime(s). The balance of the gift that is not required
to purchase the annuity contract is retained by the charitable
organization to help continue their ongoing efforts.
Why establish a Charitable Annuity?
A Charitable Annuity provides a number of benefits including:
• Ability to accept and process appreciated securities
on which the donor does not have to pay capital gains tax.
• Receive income for life now as well as a current charitable
tax deduction.
• Help a charity that you support by creating an immediate
benefit that can be
Who should be listed as the donor?
The donor is the person or persons responsible for making
the contribution(s) to the Charitable Annuity. If the contributions
are from joint ownership, then multiple donors can be listed.
What charitable organizations can issue an annuity?
A charitable organization that qualifies as a 501(c)(3),
and religious or educational institutions are the primary
organizations that offer Charitable Annuities. However, each
state has specific guidelines on what qualifications an organization
needs to have in order to meet that states requirements to
issue a Charitable Annuity.
When is the contribution considered a charitable donation?
A contribution is complete when the asset is out of the donor's
control. The time frame varies depending on the type of asset
and when it's transferred to the account. The transfer process
for an asset other than cash usually takes less than two weeks.
What is the minimum to establish a Charitable Annuity?
The minimum amount that is required for a charitable Annuity
backed by a Commercial Annuity is $20,000.
What types of assets can be contributed?
Cash, mutual funds, bonds, most publicly traded securities
and real estate on a case by case basis. Please give us a
call to help review your holdings to determine if they are
appropriate for use in a Charitable Annuity.
Can I contribute foreign stocks?
Yes, if they're traded on domestic stock exchanges. If they're
not, please contact us prior to donation so we can have the
security properly reviewed on a case by case basis.
What type of asset is best to contribute?
Appreciated securities that have been held for more than
one year make the most effective contributions. You can avoid
the capital gains tax on the securities and also receive a
tax deduction for your federal income taxes.
Can additional contributions be made to my Charitable Annuity?
There is no limit to the number of contributions made to
Charitable Annuities. However, a new contract would need to
be issued for each additional contribution.
For additional Information on a Charitable Annuity,
Click here to receive a Free Pooled
Income Funds Investors kit.
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