“Consider yourself a prime candidate for investing with your college,” William Baldwin explains in Forbes, if:
- you’re in a high tax bracket
- you’d like to consume a certain chunk of your own principal (rather than leaving those assets to heirs)
- your health is good
- you own appreciated assets in a taxable account and you’d like to sell (but the capital gains tax would be burdensome)
- you really like the institution’s mission and want to support it
- You can diversify without paying an immediate capital gain (in fact, you can claim a tax deduction all in the first year, “skipping over” the tax that would be due on the appreciation in the assets).
- The annuity payments are highly secure, backed by an endowment many times larger than its liabilities.
- You get a tax deduction upfront.
- You receive a fixed, reliable amount of income for life (regardless of the rate of return the charity actually earns on the money).
- The income can begin immediately or be deferred until a later time (the older you are, the higher the payout rate.
While the attorneys at Rebecca W. Geyer & Associates do not offer tax advice, we do coordinate efforts with other advisors to address the areas of tax and estate planning that overlap. For estate planning that keeps both income and charitable wishes in mind, a gift annuity might be just the thing.
- by Rebecca W. Geyer