Gifts That Pay You Income
Life-income gifts can be a wonderful way to give to Millikin while getting a benefit for yourself and your loved ones, as well. Life-income gifts can provide you with a reliable stream of income, while offering significant tax savings and making a meaningful future gift to Millikin.
Millikin has benefitted from the generosity of donors who have created charitable gift annuities and charitable remainder trusts. Read on for more information about these life-income gifts.
We strongly advise donors considering this type of gift plan to first consult with their attorney and/or financial advisor for additional information.
A charitable remainder unitrust is a tax-exempt, irrevocable trust designed to reduce the donor's taxable income by paying the donor (or another beneficiary) an annual amount of interest based on the principal of the trust, which is revalued annually. This amount is paid for the lifetime of the donor or beneficiary, or for a fixed term of no more than 20 years. Additional assets can be placed in the trust. When the trust ends, the remaining assets-the "charitable remainder"-are distributed to Millikin. You receive an income-tax deduction for the charitable remainder value of the trust, and are not subject to capital-gain taxes if the trust was funded with appreciated assets.
Example: Joanna Smith, age 65, owns several shares of stock worth $100,000, which she purchased many years ago for $10,000. She would like to sell the stock, but doesn't want to pay the steep capital gain tax on the sale. By working with her financial advisor and attorney, Joanna transfers the stock into a unitrust paying an annual amount of 5%. She will receive 5% of the fair market value of the trusts assets, revalued each year, for her lifetime. This amount is significantly more than the dividends she was paid for the stock, and she also completely avoids paying the capital gains tax that would have been levied had she sold the stock. After Joanna's lifetime, Millikin will receive the remaining trust assets.
A charitable remainder annuity trust is similar to a unitrust in how it is established; however, rather than paying the beneficiaries a percentage of the trust assets as revalued annually, the annuity trust provides payment to you or a beneficiary in a fixed amount based on the value of the trust when it is established. The amount must be at least 5%, but no more than 50%, of the initial fair-market value of the trust.
Unlike a unitrust, additional assets cannot be placed in an annuity trust. Benefits include a tax deduction for the charitable remainder value of the trust. You may also avoid paying capital gain taxes if the trust is funded with appreciated property.
Create A Legacy at Millikin – and Get Paid for Life!
Now is one of the best times to set up a charitable gift annuity.
Consider making a gift to Millikin that helps the university thrive while giving you annual payments for life – plus a tax benefit. Establishing a charitable gift annuity (CGA) is a great option for one to two individuals who wish to support the university and its students while enjoying the security of a fixed income source during their lifetimes.
And now is one of the best times to set up a charitable gift annuity. Effective July 1, 2022, payout rates increased for the first time in several years!
Here's how it works: In exchange for making a gift of at least $10,000 to Millikin, you receive guaranteed interest payments for life. Payments are based on the gift amount and the ages of the individuals at the time the gift is made. Also, the donor may opt for payments to provide payments for up to two people, such as the donor and a dependent. Ultimately, your gift becomes a living legacy designated by you to support the area of your choice at Millikin.
Establishing a charitable gift annuity is a simple process. Gifts of cash, marketable securities or other appreciated property owned longer than a year are accepted; so are required IRA distributions. Once your rate is locked in, it won’t change, no matter despite how volatile the market and economy may be in the future.
Here’s an example of payments based on establishing a $25,000 CGA at Millikin:
To Learn More
Call Millikin’s Alumni & Development Office at 217.424.6383 or email Senior Director of Major Gifts Dan Baker at email@example.com to request a personalized illustration showing the benefits of establishing a charitable gift annuity at Millikin.