Life Income Gifts

For further information on these guidelines, please contact the Office of Gift Planning.

Charitable Gift Annuities
A charitable gift annuity is a contract between the donor and one of the Masonic Charities. You transfer cash or appreciated securities held long-term to your favorite Masonic charity. In return, you (and/or someone you designate) will receive regular cash payments for as long as you (and or your designee) live. You may realize additional tax savings, since a portion of the gift asset's appreciation will bypass the capital gains tax. You also receive an immediate tax deduction for part of the amount transferred, subject to the same rules of deduction for gifts of cash or long-term appreciated securities as for outright gifts.

A charitable gift annuity has an attractive provision for the taxation of each cash payment. Initially a portion of each payment is treated by the IRS as nontaxable return of the donor's principal; another portion is taxed as a capital gain to the donor if long-term appreciated assets have been contributed; and the balance is taxed as ordinary income. After any capital gains and the principal are recovered, all remaining cash payments are treated as ordinary income. A charitable gift annuity may have no more than two income beneficiaries.

The minimum contribution to establish a charitable gift annuity is $5,000. The minimum age for a one-person charitable gift annuity is 40 and for a two-person charitable gift annuity at least one person must be age 50.

Deferred Charitable Gift Annuities
Like a regular gift annuity, a deferred gift annuity is a contract providing for the payment of a fixed cash payment. However, payments do not begin until a future date which the donor chooses. The longer the delay between the creation of the deferred gift annuity and the commencement of payments, the larger the income tax charitable deduction resulting from the gift and the higher the annuity rate.

Individuals facing limits on the amount they can contribute to their retirement plan often view the deferred charitable gift annuity as an attractive alternative. This strategy allows donors to ensure a guaranteed retirement income, receive an immediate income tax deduction during high-earning years, and make a gift to any one of the Masonic Charities using the money they had already budgeted for savings.

Charitable Remainder Trust
A charitable remainder trust allows you to transfer assets into a separately managed trust that will provide you income for your life (and/or the lifetime of those you name) or a specific period of years (up to 20 years). At the end of the trust term the remaining assets go to the designated Masonic charities.

A trustee, selected by the donor(s), manages the assets of the trust, provides tax statements to the IRS and the beneficiaries, and issues payments to the income beneficiaries on a periodic basis. The board of the designated Masonic charity may serve as trustee of a charitable remainder trust provided it is a majority remainder beneficiary of the trust, the minimum investment in the trust is $100,000 and the minimum age of a one person income beneficiary is 40 years (or 50 years if there are two income beneficiaries).

There are two general types of charitable remainder trusts: the charitable remainder unitrust and the charitable remainder annuity trust.

Lead Trusts
A charitable lead trust holds an income-producing asset in a trust for a fixed term, or for the life of an individual. During this time, income is paid to the designated Masonic Charity. At the conclusion of the trust term, the asset is returned to the donor (in the case of a grantor lead trust) or to another beneficiary (in the case of a nongrantor lead trust). This donation strategy is generally appropriate only when donation amounts exceed $500,000.

To make a life income gift, please contact the Office of Gift Planning.