The Diocese of Rockville Centre has established
a Charitable Gift Annuity Program as another way of exercising
good stewardship over financial resources.
A Gift Annuity is a simple idea. You make a gift of cash
or marketable securities to the program and in turn, we provide
you with a guaranteed payment for the rest of your life.
Upon the death of the annuitant the remainder of the contract
will be removed from the Diocesan Charitable Gift Program and
paid to the Diocese, which in turn will pay the recipient of
your choice.
Giving
Through Gift Annuities
Donations can be designated for a number of Diocesan Services
some of which include:
Your Parish
Pastoral Services
Catholic Charities
Diocesan, Parish, or Regional Schools and Educational
Services
Generous
Tax Benefits Receive an Immediate Tax Reduction:
Because a portion of a gift annuity will be used for charitable
purposes, you are entitled to an income tax deduction in the
year of the gift. For a period of time a portion of each payment
may be free of income tax or taxed at capital gain tax rates
that are lower than tax rates on other income. The amount used
to fund your gift annuity may also be free of gift and estate
taxes. You then would enjoy income and tax benefits today on
a gift you may have planned to make in the future through your
will.
You Can Avoid Some Capital Gains Taxes:
If you fund your Gift Annuity with an appreciated asset, for
example common stock, you can avoid the applicable capital
gains on the gift portion
You Can Avoid Probate Cost and Estate
Taxes: The gift amount transferred will not
be included in the donor's total estate value, which in turn
will usually lower the estate tax due.
Increased
Income
Gift annuities can be a way to generate more income. Gift
annuity payments include a return over time of a portion of
the amount used to fund the annuity.
It is possible for two people
to enjoy payments from a charitable gift annuity. Payments
would continue for as long as either lives. They would
receive a
charitable gift deduction
in the year of the gift, and a portion of each year's
payment would be tax-free for a number of years just like
an annuity based on one person's life.
Provide
For a Loved One
A charitable gift annuity can also make it possible to make
a charitable gift while helping meet the financial needs of
a loved one. The payments from the annuity do not have to
go to the owner of the gift annuity. This enables one to increase
the income of whomever they designate the recipient, while
receiving the charitable deduction themselves. There may however,
be gift tax consequences for such a gift.
Gift
Annuity Rates
Payment Rates are based on the American Council on Gift Annuity
Rates and are thus subject to change. However once a gift
annuity is completed the rate for that particular annuity
will never change. A number of factors including age, interest
rate assumptions, number of payment recipients, and other
factors are considered when determining payment rates. Please
contact us to check on current rate information.
We are offering the following comparisons to help you see
some of the benefits of a gift annuity.
Deferred Payment Annuity Examples
Age
Rate
Gift Amount
Charitable
Deduction
Annual Income
50
12.3%
$25,000
$8,600.50
$3,075.00
55
9.7%
$25,000
$8,632.75
$2,475.00
Immediate Payment Annuity Examples
Age
Rate
Gift Amount
Charitable
Deduction
Annual Income
60
5.70%
$25,000
$6,415.50
$1,425.00
65
6.00%
$25,000
$7,775.25
$1,500.00
70
6.50%
$25,000
$8,987.50
$1,625.00
75
7.10%
$25,000
$10,386.75
$1,775.00
These rates are subject to change based
on the timing of your gift.
An example of how a Charitable Gift Annuity can work:
John and Ann are typical of many retirees looking for greater
returns on their savings.
They have $100,000 in CD's at their local bank that are about
to mature. Instead of rolling the money into another CD they
choose a Charitable Gift Annuity. At their ages (75 and 74)
the $100,000 gift would pay them a fixed income of $7,000
a year (7.0% rate) as long as either of them is alive. They
would also receive a charitable deduction of more than $30,000
(based on Federal Discount rate of 5.8%). This couple benefits
from a steady income stream, an income tax charitable deduction
and the joy of knowing that, at the end of their lives, the
Diocese will transfer the funds remaining from their gift
annuity to their parish.
Making a gift and keeping lifetime annuity payments is especially
attractive to donors who own securities that are highly appreciated
but pay low dividends. They would like to sell and reinvest
for more income, but face heavy capital gains taxes if they
do. By making a gift of the securities and retaining a lifetime
annuity, they receive payments based on the full current value
of the securities and can defer any resulting capital gain
over the expected term of the annuity.
You can get an estimate of gift
benefits by clicking the
link here or the logo to the
right. This will open a new window where you will need
to enter your
personal data to receive the
calculations. Your actual benefits may vary depending
on the timing of your gift. This functionality has been
provided by PG Calc Incorporated.
Frequently
Asked Questions Are there any age or gift amount restrictions?
The minimum amount for an annuity agreement is $10,000.00.
Agreements shall be limited to one or two lives, and the minimum
age for the annuitant shall be 60 for immediate payment annuities
and 50 for deferred payment annuities. However, payments cannot
begin before age 60.
Which is better to give a gift of cash
or stock?
A person who is considering a significant charitable gift
should first look to his or her stock portfolio. People who
urchased stock at thirty are often shocked by how much the
stock has appreciated by the time their 60 years old. If you
fund the gift annuity with long-term appreciated securities
and are the initial annuitant, you can defer any resulting
capital gain on the appreciation attributable to the non-charitable
portion of the annuity. Any capital gain attributable to the
charitable portion of the annuity escapes capital gain taxation
entirely. As you receive the annuity payments, a portion of
each one is treated as capital gain income throughout your
life expectancy. Additionally, a portion of each payment may
be tax-free. The tax-free portion (if any) is smaller than
when an annuity is funded with cash. The balance is taxed
as ordinary income.
What are the estate tax consequences?
If you establish a gift annuity for yourself, the annuity
has no value upon your death, and therefore, no amount is
in your estate.
If you establish a gift
annuity solely for another individual, no amount will
be included in your estate, but there will likely be
gift tax consequences when the gift annuity is established.
If you establish a gift annuity for yourself with a
successor annuity interest, the value of the survivor
annuity will be included in your estate. If the surviving
annuitant is your spouse, the value of the survivor
annuity will qualify for the estate tax marital deduction.
If the surviving annuitant is not your
spouse the value
of the survivor annuity will be included in your estate
and may be subject to estate tax.
Do I need a lawyer to set up a Charitable
Gift Annuity?
A charitable gift annuity is a simple contract between you
and the charitable organization you are not creating a trust
therefore the transaction does not require help from attorney's
or other professionals. However, you are encouraged to consult
your estate or financial advisor before entering into the
contract.
If I live long can my Annuity run
out of money?
When you establish a charitable gift annuity you are entering
a contract with the Diocese under which the Diocese is obligated
to pay you (or another annuitant) a fixed dollar amount for
the rest of your life. These payments to you are a general
obligation of the Diocese backed by all of its assets. Therefore,
even if you live beyond your life expectancy, the Diocese
must continue to make the annuity payments regardless of whether
any portion of the gift transferred remains.
How can
I perform a calculation using my own data? You can get an estimate of gift benefits
by clicking the
link here or the logo to the right. This
will open a new window where you will need to enter your
personal
data to receive
the calculations. Your actual benefits may vary depending
on the timing of your gift. This functionality has been
provided by PG Calc Incorporated.
Contact
Us
For information or to answer any questions you can call or
e-mail:
Treasury Operations
Collin Baugh
Diocese of Rockville Centre
50 North Park Avenue
Rockville Centre, NY 11570
Phone: (516) 678-5800 Ext. 295
E-Mail: cbaugh@drvc.org
*If you are interested in a personal calculation please include
in your e-mail: the amount of the gift, your birth date and
if a joint gift the birth date of the other individual.
The information on this site is not intended as legal advice.
Figures cited in examples are based on current rates at time
of printing and are subject to change.
Introduction
