Life Income Gifts
Do you want to support AMC but worry about having enough income for yourself and your loved ones? Life-income gifts, such as gift annuities and charitable remainder trusts can provide donors with an income stream, significant tax savings and the satisfaction of providing AMC with vital, long-term resources.
The creation of life-income gift benefits both the donor and the recipient. It's a "win-win" situation.
Charitable Gift Annuities
We offer two types of gift annuities managed by Citizens Bank.
- Immediate-Payment Gift Annuity
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To establish a charitable gift annuity, you make a gift to AMC and in exchange receive a fixed annual dollar amount for life. The principal remaining at your death will then benefit AMC.
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While gift annuities can be funded at a younger age, this type of gift might be especially attractive if you are aged 70 or above, you want to support AMC and you would like to secure an immediate stream of income for yourself or for yourself and your spouse. The amount of payments is based on the age(s) of the income beneficiary(ies). The older one is, the higher payout rate one receives. In addition to the stream of fixed payments, the gift will also generate an immediate charitable income-tax deduction. If you are younger and you wish to begin receiving payments at a future date, a deferred-payment gift annuity might be a more suitable gift arrangement.
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For AMC, annuitants must be 55 years or older and the minimum annuity is $5,000.
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- Deferred-Payment Gift Annuity
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This type of gift might appeal to you if you want to support AMC, you are 40 to 60 years old, have a high income, need to benefit now from a current tax deduction, and are interested in augmenting potential retirement income.
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The deferred-payment gift annuity involves the current transfer of cash or marketable securities in exchange for which AMC agrees to pay the donor an annuity starting at a future date - usually at the donor's retirement. The gift can consist of a single transfer, a series of transfers, or periodic transfers to the plan in high-income years.
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You realize an immediate charitable deduction for the gift portion of each transfer to the deferred gift-annuity plan. A portion of each annuity payment, when the payments begin, will be a tax-free return of principal over the life expectancy of the annuitant. When appreciated, long-term capital-gain securities are transferred, any reportable capital-gain is spread out over the donor-annuitant's life expectancy.
- There is a $5,000 minimum for deferred gift annuities, and no age limit for deferred annuitants.
Charitable Trusts
Trusts begin at $100,000. A bank or trusted advisor can serve as trustee.
- Charitable Remainder Unitrust
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The unitrust provides for annual payments to the designated beneficiary(ies) of a specified percentage - at least 5 percent of the value of the trust as it is valued each year. Since the value of trust assets may vary from year to year, the payments may also vary. At the death of the last income beneficiary, the trust principal is distributed to AMC.
- In addition to the income you will receive from the trust, you will also be entitled to a charitable income-tax deduction for the value of our remainder interest in the trust assets.
- Charitable Remainder Annuity Trust
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The annuity trust provides for payment of a fixed dollar amount - annually or at more frequent intervals - to the designated beneficiary(ies).
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The amount must equal at least 5 percent of the initial far-market value of the trust. At the death of the last beneficiary, the trust principal is distributed to AMC.
- In addition to the income you will receive from the trust, you will also be entitled to a charitable income-tax deduction for the value of our remainder interest in the trust assets.
Pooled Income Fund
Another option for donors who would like to make a gift to AMC but need income, especially those with appreciated securities, is the pooled income fund. A pooled income fund is very similar to a mutual fund.
To make such a gift, you sign a pooled income fund agreement and transfer cash or appreciated securities to the fund. Your gift purchases "units" in the fund based on the fair-market value of your gift and the current market value of fund units. Income from the pooled fund is distributed on a pro-rata basis to the beneficiaries you specify. Beneficiaries receive income for life. When the last beneficiary dies, the value of your units in the fund will be distributed to AMC. You avoid capital-gain tax, if any, in the asset you use to make your gift.
When the last beneficiary dies, the value of your pooled fund units will benefit AMC.
Citizens Bank manages AMC's Pooled Income Fund. The Fund is reserved for donors 60 years and older. An initial minimum gift amount of $5,000 applies. Additional gifts of $1,000 can be made at any time.
Please note: This is general information and is not presented as specific legal or tax advice. Donors should consult with their financial advisors for counsel.
