Explore your options, including tables and sample rates of return, among the three outlined here.
Charlotte W. is a retired nurse grateful to Marymount for the preparation she received for her career. She is careful about managing her budget, however, and didn't think she'd be able to consider a major gift to the University. She had $100,000 in CDs that were producing a 2% annual return for her. The Development Office showed her how she, at age 75, could use that same asset to fund a gift annuity at Marymount for which she would receive annual payments of $7,100, a part of which would be tax free. Charlotte was delighted to realize that she could actually count on more income by giving her money away!
Gerald and Lydia Y. have been connected to Marymount since the 1960s when they first met Sister Majella. They have some highly appreciated stock that they have hesitated to sell because of the capital gains tax they would have to pay. By giving that stock to Marymount for a charitable gift annuity, however, they will greatly reduce those taxes while creating a revenue stream that is far greater than what they had been receiving from the stock. Because they are each 85, Marymount will be guaranteeing an annual rate of return of 7.9% as long as one of them is alive.
In addition to the income they receive from their annuities, Charlotte and the Ys also received a charitable gift deduction in the year they made their gifts. And just as important, a portion of the annual income from their annuities is tax free.
The rates of return vary with the age of the annuitant(s) at the time of the gift; the rates for a single-life annuity are slightly higher than they are for a two-life annuity. The minimum age is 60. For information regarding current rates, please contact Kathleen Zeifang, Executive Director of Development & Alumni Relations, at (703) 284-1543 or firstname.lastname@example.org
Deferred Gift Annuities
Let's suppose you would like to consider a gift annuity to Marymount but are still working and don't yet need the income it would produce. In this case, a deferred gift annuity might be the best choice for you. The longer you defer your payments from the annuity, the higher your rate of return will be.
Brenda S., age 60, is a human resources specialist for the government who credits Marymount with giving her the background she needed to succeed in her career. She earns a comfortable salary, but when she retires in five years her income will be about half of what it is now. By deferring her first payment until her retirement, she will receive income at the rate of 7.6% instead of 5.7%. In addition, Brenda will be paying taxes on that income at a much lower rate, since her total income after retirement will be lower than it is now. Brenda is delighted to make a $20,000 gift to Marymount. She receives a charitable deduction for it this year, and starting five years from now, she will receive $1,520 every year for the rest of her life, some of which will be tax free.
For information regarding current rates, please contact Kathleen Zeifang, Executive Director of Development & Alumni Relations at (703) 284-1543 or email@example.com
Charitable Remainder Trusts: Unitrusts and Annuity Trusts
Charitable remainder trusts (CRTs) are the life-income gifts that provide the most flexibility to donors. They come in two versions:
- A unitrust will provide you or your beneficiaries variable income based on the principal of the trust.
- An annuity trust will provide fixed income.
Trusts can provide income to multiple beneficiaries for life or for a fixed set of years. As such, they may provide retirement income or perhaps college expenses for a child or a grandchild.
These trusts are called remainder trusts because they provide income to you or your beneficiaries for a certain amount of time, after which the remainder of your gift becomes the property of Marymount.
The minimum amount needed to fund a Charitable Remainder Trust is $50,000. They are ideal if you:
- are interested in making a major gift to Marymount and maintaining (or possibly increasing) your income;
- hold securities or real estate and want to avoid capital gains taxes; or
- need flexibility in the distribution of your gift.
Gertrude M. inherited a house that she had no use for. By giving the house to Marymount, she was able to set up a trust that now pays all her expenses in her retirement community. She also avoided considerable taxes, indirectly increasing her income. She has the pleasure of knowing that someday, her gift will be used to establish a fund that will benefit Marymount students for generations to come.
For a personalized illustration of any of these life-income gifts, please contact Kathleen Zeifang, Executive Director of Development & Alumni Relations, at firstname.lastname@example.org
or (703) 284-1543.