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» Donate » Annuities FAQs
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Annuities FAQs
Information About Annuities
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| Q: |
If I fund a gift annuity, can I withdraw the funds later? |
| A: |
No. The agreement must be a permanent transfer in order to qualify for the attractive tax benefits that result from making your gift in this way. |
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| Q: |
How often will I receive my annuity payments? |
| A: |
Gift annuity payments are made at least annually, hence the term “annuity.” We will be glad to discuss dividing them into more frequent payments if you desire. |
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| Q: |
Is a gift annuity a type of trust? |
| A: |
No. A charitable gift annuity is a contractual agreement between the donor(s) and the charity. Payments are backed by all of the available assets of the charity. |
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| Q: |
Can a gift annuity be a good way to provide an income for a surviving spouse? |
| A: |
Yes. Many couples enter into gift annuities that will make payments for as long as either of them lives. |
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| Q: |
Can I give gift annuity payments to someone else? |
| A: |
Certainly. A gift annuity can be a wonderful gift for a relative or special friend. |
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| Q: |
Is it true that the older the person(s) receiving payments, the higher the payment rate? |
| A: |
Yes. For older persons it is possible to return more of the initial amount transferred and still produce a significant charitable gift when payments cease. |
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| Q: |
And the rate doesn’t fluctuate with the stock market or interest rates? |
| A: |
No. The payment amount is set permanently when you make the gift, and it never changes once payments begin. |
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| Q: |
Can I have more than one gift annuity? |
| A: |
Yes. In fact, some people create a new gift annuity each year and enjoy higher rates on each subsequent annuity as a result. |
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| Q: |
Who can benefit from a two-life gift annuity? |
| A: |
Any two people may establish an annuity contract together. They need not be related. |
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| Q: |
Is there a difference between the two-life gift annuity rate and the single life rate? |
| A: |
The rate is slightly lower when two persons receive payments for life, since more than one person will benefit. |
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| Q: |
Can a single life annuity be changed later to a gift annuity for two lives? |
| A: |
No. The number of persons receiving payments can only be decided at the time the gift is made. |
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| Q: |
Can the person named to receive payments after the first recipient’s death be changed? |
| A: |
No. Once you determine who will receive the payments from a gift annuity, it cannot be changed. |
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| Q: |
Must payments begin immediately? |
| A: |
Depending on circumstances, it may be possible to delay the start of payments for one or more years. Ask for additional information if you are interested in this option. |
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| Q: |
What if the portion of my annuity that is considered a charitable gift exceeds the maximum amount I’m allowed to deduct on my income tax return in the year I make the gift? |
| A: |
In that case, you can carry over the extra deduction into as many as the next five tax years. |
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| Q: |
If I make a gift of appreciated securities or other assets that have increased in value to fund my gift annuity, do I avoid tax on the capital gain? |
| A: |
You will avoid capital gains tax on the part of the property that is considered a gift. The rest of the capital gain will be spread over a number of years if you and/or your spouse receive the payments. An additional benefit is the ability to report the capital gain portion of the payments at what may be lower rates of tax than you may pay on other income. Special rules may apply if someone other than you receives payments. |
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| Q: |
Do gift annuities affect my federal gift and estate taxes? |
| A: |
In the case of a gift annuity for the life of the donor and/or a spouse, federal gift and estate taxes are generally avoided on the amount donated. |
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