Life income plans such as charitable gift annuities or charitable trusts allow you to provide for your personal financial needs, or the needs of family members and loved ones, while making a significant gift to Washington University.
Life income plans offer these benefits:
- You and/or other individuals receive continued payments, which may be partially tax-free.
- You will receive a charitable income tax deduction for a portion of your gift.
- When you use appreciated assets such as stock or real estate, you can access capital gains tax savings.
- Estate tax benefits may occur at the end of the trust period.
Please consult with your legal or tax advisor before making a charitable gift.
Life income gift options
Create a charitable gift annuity — the most common life income plan.
Your gift annuity may be funded with cash or publicly traded securities of $25,000 or more. In return, you and/or your spouse or designee receive guaranteed lifetime fixed payments — a portion of which is usually tax-free.
Your fixed payment rate is based on the age or ages (if a second recipient is named) of the payment recipient(s) at the time the gift is made. Both recipients must be 60 or older when the gift is made. When the gift annuity ends, the remaining assets are used by the university to support the school or program of your choice.
Gift annuity sample payment rates, by age*
60 & 60: 3.6%
65 & 65: 3.8%
70 & 70: 4.2%
75 & 75: 4.6%
80 & 80: 5.4%
85 & 85: 6.5%
90 & 90: 8.2%
*Rates are subject to change
Fund an annuity now, and receive payments later in life.
This approach is an attractive life income plan for individuals who would benefit from an immediate income tax deduction and can wait to receive payments until a future date, e.g., until retirement.
By deferring payments, you can receive a payment rate that is higher than the payment rate of an immediate-payment charitable gift annuity. Your payment rate is determined by your age and the amount of time your payments are deferred.
The minimum gift amount is $25,000. You will receive a charitable income tax deduction for a portion of your gift, and if you use appreciated securities to fund your gift, you will also receive capital gains tax savings.
Receive variable lifetime payments with this university-managed trust.
For donors of appreciated securities and real estate, a popular gift strategy is the charitable remainder unitrust. Assets are transferred to the university, in this case as trustee of the unitrust.
The unitrust makes income payments for the lifetime(s) of the donor(s). You may also continue the payments for a period of time to other individuals, such as your spouse, children or loved ones.
The payment is based on a percentage (e.g., 5 percent) of the market value of the trust assets, as revalued annually. As a result, your payments will vary from year to year. When the payments end, the remaining assets are distributed to the university for the purpose(s) you specify in the trust. Many donors use the unitrust to increase income from highly appreciated assets that have little or no yield.
When serving as trustee, the university will draft the trust for review by you and your attorney, as well as manage the trust with no administrative fees. The university will also complete all required filings with the IRS.
You can establish a charitable remainder unitrust with a minimum gift of $50,000 and may add to your unitrust at any time. If your gift is appreciated securities or real estate, you do not pay capital gains tax on the sale of your property, because the property is sold by the university as trustee. You also will receive a charitable income tax deduction on a portion of the value of your contribution.
Receive fixed lifetime payments with this university-managed trust.
You can fund a charitable remainder annuity trust with publicly traded stock or with cash, with the university serving as trustee. The trust makes fixed payments to you and/or your designee(s) for your lifetime(s). You may also continue the payments for a period of time to other individuals.
The payment amount is fixed, based on the initial amount of your gift. When the payments end, the principal is distributed to the university as you designate in the trust.
When serving as trustee, the university will draft and manage the trust with no administrative fees. The university will also complete all required filings with the IRS.
You can fund an annuity trust with a gift of $50,000 or more. While you may not add to an existing trust, you can establish new trusts. If your gift is appreciated securities or real estate, you do not pay capital gains tax on the sale of your property, because the property is sold by the university as trustee. You will receive a charitable income-tax deduction for a portion of your donation the year you make your gift.
Establish a life-income plan through your estate.
You may include language in your estate plan that directs a gift to the university by establishing a plan that will first make payments to named beneficiaries such as your spouse, family members or friends.