Charitable Gift Annuities

Charitable gift annuities provide for Marmion's future and an income for life for the donor, and, if desired, a second beneficiary.

A charitable gift annuity is an agreement between you and Marmion. In "exchange" for your contribution of cash, securities or other property, Marmion promises to make an annual payment to you for your lifetime and the lifetime of a second beneficiary. Your commitment will also qualify for an immediate tax deduction.

The annuity rate, recommended by the American Council of Gift Annuities, is based upon the age of the donor and second beneficiary. For example, a donor age 65 who establishes a single life annuity would be paid 6.0 percent. If a donor, age 65 establishes a two-life annuity and the second beneficiary is 63 years of age, the annuity rate would be 5.6 percent. In this example, the annual payment on a $25,000 single life annuity would be $1,500 and $1,400 on a two-life annuity. (Suggested annuity rates change periodically; contact Marmion for the current rates.)

The charitable deduction for income tax purposes is also based upon the age of the donor. A donor, age 65, could expect a deduction of approximately 40 percent of the amount of the gift. The value of the deduction is based upon the difference between the amount given and the "present value" of the annuity payments you or your beneficiary will receive, as determined by IRS tables. A similar calculation is done to determine the portion of the income that is tax-free.

A gift annuity has an additional tax advantage if funded by a gift of appreciated securities. The full fair market value of the securities will be used to establish the annuity. The donor by-passes any capital gains tax (currently 15 percent on securities held 12 months or longer). In the case of securities that pay a low dividend rate, the donor may actually realize a gain in annual income by establishing an annuity.

There's a final tax benefit, as well. Because the asset has been removed your estate, it will not be subject to any applicable estate tax.

Many financial planners recommend that at least a portion of your retirement savings be "guaranteed." Rather than purchase a commercial annuity through an insurance company, consider a charitable gift annuity and have the added benefits of helping a favorite cause and realizing tax savings.

Charitable Gift Annuity Rates listed below is a sampling of suggested charitable gift annuity rates provided by the American Council of Gift Annuities, effective January 1, 2003:

Single Life Annuity

AGE
RATE
55
5.5%
60
5.7%
65
6.0%
70
6.5%
75
7.1%
80
8.0%
85
9.5%
90 and over
11.3%

Two Life - Joint and Survivor Annuity

YOUNGER AGE
OLDER AGE
RATE
55 55-57
5.0%
60 60-61
5.4%
65 66-70
5.7%
70 72-74
6.0%
75 76-77
6.4%
80 83-84
7.2%
85 87
8.1%
90 92
9.6%