Weekend Reading – How do Charitable Gift Annuities and Charitable Remainder Trusts Work?

For some donors, an alternative to an outright cash gift will flexibly fulfill their charitable intent as well as personal financial goals

 

For a nonprofit, “Cash is (often) King”: A donor receives a charitable deduction for an outright cash gift and the nonprofit can immediately put it to work to fund a building, a program or a project. However, a donor’s long-term objectives to support a nonprofit might be better accomplished in structuring a deferred gift, such as a charitable gift annuity or a charitable remainder trust.

WHAT IS A CHARITABLE GIFT ANNUITY (CGA)?

A CGA is a contractual agreement between a donor and a charity. The donor(s) transfer assets as a gift to the charity and in return, the charity is obligated to pay a fixed annuity to one or two annuitants (recipients of the annuity), for the lifetime of the annuitant(s).

WHAT IS A CHARITABLE REMAINDER TRUST (CRT)?

A CRT is an irrevocable trust that generates a potential income stream for the donor, or other beneficiaries, with the remainder of the donated assets going to a charity or charities.

WHAT’S BEST FOR DONORS?

The most appropriate philanthropic solution will be determined by consultation with their legal counsel and tax advisors. Generally, an outright gift will remain the vehicle of choice for most donors. For others, the flexibility of a charitable gift annuity or a charitable remainder trust will fulfill not only their personal financial planning goals, but their charitable intent in supporting a nonprofit for its continued success.

 

Read the full article to learn more about deferred gifts

 

Comments


Contact

We're ready to assist you

If you are looking ahead to how you can best invest your money for the future, our advisors would be happy to talk with you.

Contact us today