Giving to Others Through a Charity
Basics of Gift Annuities
A gift annuity is a philanthropic tool which can be used for providing a lifetime of income for one or two people. With a gift annuity, usually a sum of money is given to a charity with the promise that one or two people will receive payments from that fund for the remainder of their lives. Gift annuities can be set up to be deferred (disbursements start at a later date) or immediate (start paying out immediately).
The Deferred Gift Annuity
A deferred gift annuity is generally set up to provide an income to anticipate a need of some sort. This can be retirement, secondary education, or any other expected need in the annuitant's life. A deferred annuity is useful for someone who wants to ensure a person they care for has financial support after they have passed, like parents or grandparents might leave for their children or grandchildren.
The Immediate Gift Annuity
Immediate gift annuities are arranged to provide an income stream quickly to the designated annuitant, or beneficiary. As with other gift annuities, payments from the immediate gift annuity is managed by a charity for the life of the beneficiary. In the event of the beneficiary's death, any funds left in the immediate gift annuity become the property of the charity.
Considering a Gift Annuity?
Setting up a gift annuity properly can be complex and difficult. It is always wise to seek professional guidance when arranging a gift annuity to ensure it provides the level of income you desire for the beneficiary.
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