Charitable Gift Annuities

What is a Gift Annuity?

A Gift Annuity is a contract between an individual and a qualified charity which exchanges a gift to charity for an annuity (guaranteed lifelong income) to the individual.

How much will my guaranteed income be?

It depends entirely on your age. The older you are when you begin a Gift Annuity, the higher the return will be. For example, a person who is 70 receives a rate of 6.5%. The rate for an 80 year old is 8.0%. Whitinsville Christian School follows the recommended rates set by the American Council on Gift Annuities.

Will this rate of return ever change?

No. Once you take out a Gift Annuity, your payment amount is guaranteed for life, regardless of what happens to the economy or stock market.

Do Gift Annuities provide any tax advantage?

Yes. There are several of them.

Immediate income tax deduction at the time you create the Gift Annuity.
A portion of the annual payment you receive is tax exempt resulting in a higher effective rate of return.
Money in a Gift Annuity generally is not included in your estate for estate and inheritance tax purposes.

How secure is a Gift Annuity?

It is very secure. The amount you contribute is placed in a Gift Annuity Reserve Fund in order to make your annuity payments. Additionally, all of the assets of Whitinsville Christian School stand behind the contract.

Will a Gift Annuity work for a married couple?

Yes, in fact many Gift Annuities are "two-life" contracts, designed to make payments for the lives of both a husband and wife. The Annuity rate is somewhat lower, however, than the rate for a single person.

Can a Gift Annuity be bought with stock instead of cash?

Yes, and it may be especially advantageous if the stock has appreciated in value. The capital gains tax which you would have owed for the year the stock was sold is spread out over your life expectancy.

How does a Gift Annuity benefit Whitinsville Christian School?

Your gift along with all gift annuity funds is placed in a reserve fund to make annuity payments as long as you are alive. After your death, the balance is transferred to the WCS Endowment Fund. A portion of the Endowment is used each year to lower the tuition cost.

Can I defer my Annuity Payments?

Yes, and it will improve your annual payment. The longer the deferral, the higher the annual annuity rate. For example, a Gift Annuity contracted for at age 65 with annuity payments deferred until age 70 yields a 9.3% rate of return beginning with the first payment; if deferred until age 74 the annuity rate is 12.6% and it's guaranteed for your lifetime. You are also entitled to an income tax deduction immediately upon establishing the Gift Annuity.

How will a Gift Annuity work for me?

Contact our Development Department. We will give you a proposal and answer any questions you may have.

IMPORTANT NOTE: Using a Charitable Gift Annuity may provide you with significant advantages. However, there is no single investment or planning program which is right for everybody. The decision of whether a Gift Annuity "fits" must also take into account your other planning needs and goals.

Keep in mind these facts about Gift Annuities:

Your gift is irrevocable. Once the gift is made you have a guaranteed income but the initial gift cannot be returned to you.
The IRS assumes that a portion of your initial gift will be returned to you in the form of Annuity payments. Therefore only a portion of the initial gift is tax deductible.
It's likely that less than the entire initial gift will be available to the charity at your death.
A Gift Annuity is a general obligation of the Whitinsville Christian School and is backed by all of its assets.
Gift Annuities are governed by state law and are regulated by the Insurance Departments of several states.
A Gift Annuity is not insurance under certain state's law.
Gift Annuities may be subject to regulation by the insurance department or securities department of your state.

Whitinsville Christian School does not provide legal advice. You should seek the independent advice of your legal council or accountant to determine the consequences of your gift before entering into any estate plan or gift arrangement.

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