An Income For Life, a Legacy Beyond Life

By: Barry G. Allen- President & CEO

I recently received a letter from a 96 year old donor who had set up a charitable gift annuity 16 years ago when she was in her 80’s. She stated “I am 96 years young and want to give a gift to my church that will live on in my memory.” And she wanted to set up another charitable gift annuity and for the benefit of the church of which she has been a member for 83 years. What an inspiration! And what insight she has exhibited in using this unique form of giving to leave a legacy of her love for Christ and His mission in the world through her church while receiving income for the remainder of her life.

Like her, you may depend upon income from certificates of deposit. If so, you wish interest rates were a lot higher than they are. You also may have been thinking about how to provide some kind of financial benefit to your church and/or other charitable causes, but do not feel you can give-up that income-producing CD.

I am happy to inform you the Kentucky Baptist Foundation offers you the same solution this woman has used. That solution is a charitable gift annuity (CGA). A CGA is an agreement between you and the Foundation under which, in exchange for your gift to the Foundation of cash or appreciated assets with a value of at least $5,000, the Foundation agrees to pay you a fixed amount each year for the rest of your life. The payout rate depends upon your age. The older you are, the higher the rate. Also, a CGA can be on one or two lives. It can be on the lives of a husband and wife, or a parent and a child. Not only is the payout partially tax-free, but also the gift is tax deducible. If you give appreciated assets, instead of cash, there likely will be capital gains tax savings. The portion of your gift not needed to make the lifetime annuity payments to you will be available at death for the cause(s) you designate in advance. You can specify for that remaining portion to be available to the charitable causes(s) outright or to be held by the Foundation in a permanent endowment fund with only the earnings, not the principal, being paid to the cause(s) in perpetuity. Anyone age 50 or older is eligible. The one-life rates range from 3.7% at age 50 to 9.0% at age 90+. Other rates are: 4.7% at 65; 5.8% at 75; 7.8% at 85.

As you anticipate the maturity of your CD, consider using it for a CGA, which will provide an income for life and a legacy beyond life. Laurie Valentine and I are awaiting your toll-free call.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.