Gifts That Pay You Income
Did you know there's a charitable gift that returns payments to you? Yes, the IRS allows and encourages these creative plans that can stretch your giving ability. Here’s how they work:
Some of the best ways to support the Jewish Federation are available through life-income gifts. While you will receive income for life or a set period of time, you can provide for yourself and the people we serve today.
What life-income gift best fits your needs?
- Charitable Gift Annuity
If you want secure, stable income at a high payout rate, a charitable gift annuity might be the answer.
A Charitable Gift Annuity is an agreement between you and the Jewish community that benefits you both. In exchange for your gift, you will receive a fixed income for life. A portion of the gift qualifies for an immediate income tax charitable deduction and the full value of the gift is removed from your estate. The assets can be then used after your lifetime by the Federation. A charitable gift annuity is a simple planned giving instrument and does not require legal assistance. Click here to see an illustration of a Charitable Gift Annuity.
- Charitable Remainder Trust
You want maximum flexibility over the investment and benefits of your gift plan.
A charitable remainder trust is a creative way to create a lasting legacy in your name and receive income from the trust for life or for a specified number of years. Upon expiration of that term, the remainder of the trust goes to the Federation to establish a permanent endowment.
Your charitable remainder trust can be designed as either an Annuity Trust, with a fixed annual payment to you, or as a Unitrust, in which case you are paid a percentage of the value of the assets. All trusts must be established with the help of an attorney.
What are the benefits to you?
- Annual income for you, a spouse or someone you designate.
- You receive an immediate tax deduction at the time the trust is created.
- You incur no immediate capital gains tax on the transfer of appreciated assets.
- You save estate taxes when these assets are removed from your taxable estate.
- You achieve your long-term charitable objectives through the creation of a permanent legacy.
A charitable remainder trust is a way to create a legacy in your name and receive income from the trust for your lifetime or a term of years. The remainderment will establish a permanent endowment for the community.
- Charitable Lead Trust
A charitable lead trust minimizes estate taxes on assets you intend to leave to your children or grandchildren, particularly when those assets are expected to appreciate.
After transferring your assets, the charitable lead trust provides fixed amount payments to the Federation for a specific term of years or for your lifetime. Thereafter, the trust's principal passes on to your heirs or beneficiaries. Additional appreciation of assets is not subject to estate taxes for the term of the trust.
What are the benefits to you?
- Reduces taxes that would otherwise be due on assets left to children and grandchildren
- Allows donor to make a substantial charitable gift over a period of years until major assets are passed on