Charitable Gift Annuity - Flexible Payment: The Details

You greatly reduce or avoid possible gift and estate tax on trust assets passing to family... if some trust income goes to charity for a few years.

Charitable Gift Annuity - Flexible Payment: The Details
You can make a gift and receive guaranteed fixed payments for life, starting at a date you select in the future. Flexible payments are higher than an immediate payment annuity and allow you to determine the date you start to receive payments.
This version of the charitable gift annuity is especially designed for younger donors. Called the flexible payment gift annuity, it makes fixed payments to you and/or another beneficiary for life, with payments commencing at a future date. Because of the flexible deferral of income:

• Audubon can offer a higher income rate for these annuities than for annuities whose income starts immediately, and
• You can select a range of dates to start your payments.

These two features make the flexible payment gift annuity quite attractive to donors in high-earnings years who are concerned about securing current tax deductions, additional sources of retirement income and maintaining flexibility for when to start retirement income.
Use a flexible payment gift annuity to help fund your retirement
Pensions and other retirement plans limit the amount of tax-deductible annual retirement contributions to the plan. If you are in this situation and wish to set aside $10,000 or more each year for your retirement in excess of those limits, you could fund a flexible payment gift annuity each year with the National Audubon Society. A portion of the gift would be deductible as a charitable contribution. You could establish a flexible annuity each year until your retirement, each time specifying a range of years when you want the annuity payments to begin. When you are ready to receive the payments you simply notify Audubon and the payments will begin and continue for the rest of your life. The longer you defer receiving payments, the greater they will be.

Planning points

The flexible payment gift annuity offers the same benefits of simplicity, security, and attractive income taxation that the deferred payment gift annuity provides our donors:

• Your flexible payment gift annuity is a contract between Audubon and you, and your annuity payments are an obligation backed by our unrestricted assets;
• Your payment amount is determined based upon when you choose to receive payments – the longer you wait to start payments, the greater the payment amount you will receive once the annuity starts;
• You secure a charitable income tax deduction based on the market value of the assets you contributed, minus the present value of the life-income interest you retained – the deduction is calculated assuming that you start payments on the first date you are eligible, even if you later defer the start of payments to a later date;
• No up-front capital gains tax is payable if you fund your flexible payment gift annuity with appreciated securities; only a portion of your gain is recognized, and the capital gains tax is spread over your annuity payments;
• Part of each annuity payment to you comes tax-free as the return of principal; *Note: The IRS provides that the capital gain and tax-free income benefits are in effect during your life expectancy. If you live longer, the entire annuity payment will be taxed to you.
• After the death of the last annuitant, the balance remaining in your flexible payment gift annuity will be used by Audubon for the purpose you designated when you created the gift annuity.
• A flexible payment gift annuity at the National Audubon Society can be made with a gift of $10,000 or more.

Please contact us so that we can assist you through every step of the process.

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