Charitable Gift Annuity - Flexible Payment: The Details

You greatly reduce or avoid possible gift and estate tax on trust assets passing to family... if some trust income goes to charity for a few years.

Is this gift right for you?

A charitable lead trust is for you if…

  • You are in high earnings years, looking for both income tax savings now and an additional source of revenue at a date you determine in the future.
  • You want to make a significant gift to us and receive payments in return.
  • You want to maximize the payments you receive from your gift — and you want to lower your income tax on those payments.
  • You want the security of payments that won't fluctuate during your lifetime.
  • You also appreciate the safety of your payments being a general financial obligation of Defenders of Wildlife.

Charitable Gift Annuity - Flexible Payment: The Details
You can make a gift and receive guaranteed fixed payments for life, starting at a date you select in the future. Flexible payments are higher than an immediate payment annuity and allow you maximum control over the date you start to receive payments.
This version of the charitable gift annuity is especially designed for younger donors. Called the flexible payment gift annuity, it makes fixed payments to you and/or another beneficiary for life, with payments commencing at a future date. Because of the flexible deferral of income:

  • Defenders of Wildlife can offer a higher income rate for these annuities than for annuities whose income starts immediately, and
  • You can select a range of dates to start your payments.

These two features make the flexible payment gift annuity quite attractive to donors in high-earnings years who are concerned about securing current tax deductions, additional sources of retirement income and maintaining flexibility for when to start retirement income.
Use a flexible payment gift annuity to help fund your retirement
Pensions and other retirement plans limit the amount of tax-deductible annual retirement contributions that individuals can make. If you are in this situation and wish to set aside $10,000 or more each year for your retirement in excess of those limits, you could fund a flexible payment gift annuity each year at Defenders of Wildlife. A portion of the gifted amount would be deductible as a charitable contribution. You could do this annually until retirement, each time specifying a range of years after you retire for the annuity payments to you to begin. When you want the payments to start, you simply notify Defenders of Wildlife and we start making payments for the rest of your life. The longer you wait to start receiving payments, the greater the payments to you will be.
Planning points
The flexible payment gift annuity offers the same benefits of simplicity, security, and attractive income taxation that the deferred payment gift annuity provides our donors:

  • Your flexible payment gift annuity is a contract between Defenders of Wildlife and you, and your annuity payments are an obligation backed by our unrestricted assets;
  • Your payment amount is determined based upon when you elect to start payments – the longer you wait to start payments, the greater the payment amount you will receive once the annuity starts;
  • You secure a charitable income tax deduction based on the market value of the assets you contributed, minus the present value of the life-income interest you retained—the deduction is calculated assuming that you start payments on the first date you are eligible, even if you later defer the start of payments to a later date;
  • No up-front capital gains tax is payable if you fund your flexible payment gift annuity with appreciated securities; only a portion of your gain is recognized, with the tax spread over your annuity payments;
  • Part of each annuity payment to you comes tax-free as the return of principal;
    *Note: The IRS provides that the capital gain and tax-free income benefits are in effect during your life expectancy. If you live longer, the entire annuity payment will be taxed to you.
  • The balance remaining in your flexible payment gift annuity after the death of the beneficiaries will be used by Defenders of Wildlife for the purpose you designated when you created the gift annuity.
  • A flexible payment gift annuity at Defenders of Wildlife can be made with a gift of $10,000 or more.

Please contact us so that we can assist you through every step of the process.

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Bequests left to Defenders are crucial to our ability to protect imperiled species and their habitats for generations to come. Have you included Defenders in your will or other estate plans?