Life Income Plans
Charitable Remainder Trusts
Charitable Remainder Trusts provide life income for one or several income beneficiaries, such as the donor and the donor’s spouse, and leaves the remainder interest to the Foundation or designated beneficiary.
There are two variations, the Annuity Trust and the Unitrust, each enabling donors to donate an asset and retain life income. Depending upon the donor’s needs, Charitable Remainder Trusts can be used as a personal retirement plan. They can be structured to pay income immediately or to defer the income. Unlike restrictions on IRA’s or qualified pension plans, there are no such restrictions on gifts that can be contributed to Charitable Remainder Trusts. Most importantly, all the contributions qualify for a charitable income tax deduction.
Pooled Income Funds
Pooled Income Funds are added to a trust established to receive cash or property in which a contributor, or anyone else so designated, receives life income. Income is based upon net earnings per unit of the Foundation’s Pooled Income Fund, multiplied by the number of units in the Fund.
The Foundation receives the remaining principal after the lifetime of the income beneficiary. Because of strict adherence to government pension rules, it is almost impossible to provide a pension benefit for someone you wish to help, like a long-time family employee.
A gift to the Foundation’s Pooled Income Fund for the benefit of a third party can help solve these problems. Pooled Income Funds generate an immediate charitable income tax deduction.
Charitable Gift Annuities
Charitable Gift Annuities enable the donor to make a meaningful gift, receive a fixed income stream for life, and derive significant income tax benefits. In exchange for the gift, the Foundation agrees to pay the donor a fixed annual sum. The payment may continue after the donor’s death to a surviving spouse. In addition to the income tax charitable deduction realized in the year the gift is made, and the subsequent cash savings from the tax deduction, a portion of the annuity payment is tax-free, since a portion of the income constitutes a return of principal. The Charitable Gift Annuity is a charitable giving vehicle of real value in retirement planning.