By: Laurie Valentine
Are the “minimum distribution rules” requiring you to take more from your IRA than you currently need for living expenses? Are you interested in establishing a charitable gift plan that will ultimately provide a significant gift to one or more charitable causes, while allowing you to “tap in” to an income stream at a later age?
A “flexible deferred charitable gift annuity” may be the way to solve your problem and accomplish your charitable giving objectives.
A deferred charitable gift annuity is gift plan in which a charity agrees, in exchange for a gift of cash, appreciated securities or real estate, to make fixed payments to the giver and/or one other person for their lifetime(s) beginning at least one year and one day after the gift is made. At the death of the “life income” beneficiary(s), whatever remains is paid out to the charitable cause(s) the giver designated.
While the annuity payments don’t start for a year or more, the giver is entitled to a charitable income tax deduction in the year the gift is made to the charity.
A “flexible deferred charitable gift annuity” offers an additional benefit. Instead of designating a particular, unchangeable start date for the annuity payments, the flexible gift annuity contract reserves to the giver the right to postpone the decision about the actual annuity payment start date until later.
Your charitable income tax deduction will be determined using the earliest date on which you can “turn on” the annuity payments. And, the annuity payment amount will vary depending on when you elect to start the payments…the longer you wait, the higher the annuity payment amount.
Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.