Gift Annuity Trusts (GAT)
A Charitable Gift Annuity is a simple contractual arrangement between the donor and The Stewardship Foundation (unlike a charitable remainder trust which is a legal trust). The gift annuity pays a guaranteed fixed sum each year for the life of one or more beneficiaries.
The age of the beneficiaries, the value of the asset used to purchase the annuity, and the prevailing investment opportunities at the time of the gift all affect the amount that can be paid.
A gift annuity trust is appropriate for individuals who wish to reduce his or her taxable estate, attain a current charitable deduction, and receive an income stream for life. For more information about a Gift Annuity Trust, contact Joe Finneran, President of Stewardship Foundation at (614) 800-7985 or .
Gift Annuity Trust — FAQ
Who can be the trustee of a gift annuity trust?
Any financial institution or financial management professional, the charity that will benefit from the annuity, and even donors themselves may serve as trustee as long as they keep the transaction separate from all their other investments.
However, because of the relative complexity of managing investments to meet the beneficiaries’ income objective, plus complying with record-keeping and tax filing requirements, few non-profit organizations serve as a trustee. They look to an experienced, ethical trustee such as The Stewardship Foundation.
Donor Story — GAT
Mary Lou Fisher is an 82-year-old widower who over the years turned $150,000 into over $1.5 million in the stock market.
During the economic downturn of 2008, Mary Lou suffered along with other investors and saw her portfolio lose over 30% of its value.
Now concerned about her health, and knowing that she will soon have heavy cash outlays for health care and assisted living, she would like to sell the stock and put the proceeds in cash and debt instruments.
Her accountant told Mary Lou that if she sold the stock and paid $127,500 in capital gains, her net worth would be about $872,500 and earn only about 4% per year. She would likely pay $12,215 in incomes taxes on an income of $34,900, leaving just $22,685 for spendable income. This worries her.
If, however, Mary Lou chose to gift a charity $1,000,000, she could earn over 7%, or about $74,000 per year from a charitable gift annuity. This news brings the peace of mind she needs to counterbalance her health worries, and the opportunity to make a significant charitable gift lifts her spirits.
Mary Lou now feels that her life has taken on a new sense of purpose. She sees her wealth as more than personal security — she sees it as meaningful.