USING A CHARITABLE GIFT ANNUITY
For whom is a charitable gift annuity to benefit the University of Michigan Health System best suited?
A charitable gift annuity is ideally suited for the person who would like to make a gift to benefit a charitable institution about which he or she cares deeply while also receiving fixed income for life. They may be used by individuals of all ages, and can also be a welcome supplement to retirement income. Charitable gift annuities have been in existence for more than a century and are one of the simplest life income plans available. Payment rates are based on the age of the annuitants. A minimum of $10,000 is required to establish a charitable gift annuity to benefit the U-M Health System.
What are the specific benefits of a charitable gift annuity?
A charitable gift annuity helps you meet your philanthropic goals while providing you with income by offering:
- An immediate income tax deduction and capital gains tax saving
- A lifetime stream of fixed income for you and, if you choose, one other person, such as your spouse
- Annuity rate yields that may be higher than some other investment returns
- The assurance that your annuity will eventually become a significant gift to the U-M Health System to be used according to your wishes
How will the University of Michigan manage my annuity gift?
The University of Michigan will maintain your annuity gift in a segregated gift annuity fund, retaining the entire amount to meet annuity payments and expenses until the death of the last surviving annuitant.
Are my gift annuity payments guaranteed by the University of Michigan?
Yes. Your charitable gift annuity will provide a fixed payout based on your age. The payout remains unchanged during your lifetime and that of your spouse or other co-annuitant, and is not dependent on the changing value of the assets over time.
How much will my charitable gift annuity to the U-M Health System yield?
Payment rates on your charitable gift annuity will be based on guidelines of the American Council on Gift Annuities. The payout rate will not exceed 10 per cent, per University of Michigan policy.
May I contribute additional amounts to my charitable gift annuity?
No. But you may establish as many separate gift annuities as you wish, with a minimum of $10,000 required to establish each annuity.
May I recall some of the principal of my gift if I need the money?
No. A charitable gift annuity is an irrevocable gift to the University.
Is there more than one kind of charitable gift annuity?
The University of Michigan offers two kinds of charitable gift annuities, current and deferred.
- A current gift annuity provides payouts that begin within a year of establishing the annuity, and the gift qualifies for a current tax year deduction.
- A deferred gift annuity provides payouts that do not begin until age 50 or later, even if the annuity is established earlier. A deferred gift annuity offers the advantage of deferring income to an age when the annuitant’s other income, and tax exposure, may have decreased. A deferred annuity, when established, also qualifies for a current tax year deduction.