As year-end was quickly approaching, it was determined that the best option for this donor was to establish two planned gifts with highly appreciated common stock. The first was a ten-year term charitable remainder annuity trust. It would pay the donor a fixed amount while he was living, and then his spouse for the remainder of the trust term, if he predeceased her, with the balance of the trust then being transferred to the charitable organization after the set term. The second was a deferred gift annuity, which would begin paying the donor 10 years from the funding date, allowing the payout rate to grow significantly during the deferral period, for his life and then for the life of his spouse if he predeceased her. Both the trust document and gift annuity contract included language that allowed the donor the right to revoke the interest to his spouse, exercisable in his Last Will and Testament.
By establishing the two separate planned gifts, the donor was able to make two large, gifts totaling nearly $4.2 million to the organization with the accompanying charitable deduction, defer the realization of capital gain on his highly appreciated common stock, receive a smaller stream of income while he was younger and still working, receive a larger stream of income after he retired, and protect his asset in the case of divorce. It was a win-win for everyone involved.
What do you like best about working in Planned Giving?
What I like best about working in Planned Giving is the people. The interactions with my colleagues and clients on a day-to-day basis bring me joy. We are all working together to achieve the donors’ intentions and support the charitable organizations.