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Gifts That Provide Income

Income for today, a gift for tomorrow. That’s what giving through a Charitable Gift Annuity or a Charitable Remainder Trust can achieve. Both giving options can accomplish your personal financial goals in the near term while ensuring your philanthropic intentions will be fulfilled at a later date.

Wilford Eleanor Lyon
Wilford and Eleanor Lyon both grew up in Jacksonville. Wilford went on to lead Independent Life Insurance Company and Eleanor volunteered at South Jacksonville Presbyterian Church. They established a charitable remainder trust to provide tax advantaged income during their lifetime and create a charitable legacy in the future. The Lyon’s charitable remainder trust will both support specific organizations and create a grantmaking initiative which will help youth in Jacksonville.

Establish a Charitable Gift Annuity

When you establish a Charitable Gift Annuity you can receive guaranteed income for life, benefit from an immediate income tax deduction, and leave a legacy that will support the causes that are important to you forever.

You may establish your Charitable Gift Annuity with cash or securities. If you donate appreciated securities, you will avoid the tax on capital gains. We will set up a contract with you that combines immediate annuity payments with a deferred charitable gift. You receive a stream of income that is fixed, regardless of market conditions. Upon your death, we set up a charitable fund on your behalf.

You can use your Charitable Gift Annuity income to supplement your own lifestyle, or that of someone else: a sibling, a dependent parent, a friend, or a former employee. You or a loved one can start receiving annuity payments immediately, or defer them to increase your charitable income tax deduction. A portion of the income may be a tax-free return of principal, while some is taxed as ordinary income or capital gains. The amount of annuity paid and the tax deduction received depends on the age of the recipient and the current annuity rate (as established by the American Council of Gift Annuities).

A Charitable Gift Annuity may be established for as little as $25,000. Income beneficiaries must be at least 65 years of age.

Establish a Charitable Remainder Trust

A charitable remainder trust offers you a great deal of flexibility, allowing you to receive income for the rest of your life, knowing whatever remains will benefit your community.

You transfer assets into a trust, and the trust pays you or a beneficiary regular income payments. Upon the beneficiary's death or after a defined period of years, the remaining assets in the trust transfer to The Community Foundation. You may choose to receive a fixed income or one that changes with market conditions. You can start receiving annuity payments immediately, or defer them to increase your charitable income tax deduction.

A portion of the income may be a tax-free return of principal, while some is taxed as ordinary income or capital gains. The amount paid and the tax deduction received depends on the age of the recipient and the current annuity rate (as established by the Internal Revenue Service).

You can pick one of these options for your Charitable Remainder Trust:

  • Annuity trust pays you a fixed dollar amount.
  • Standard unitrust pays you an amount equal to a fixed percentage of the net fair market of the trust and is recalculated annually.
  • Net income unitrust pays you the lesser of the fixed percentage specified by the trust agreement or actual trust income; some net income unitrusts allow you to make up deficiencies in past years.
  • Flip unitrust is a net income unitrust that converts to a standard unitrust upon a triggering event, such as the sale of an asset used to fund the trust.
 

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John Zell

John Zell
Vice President, Development

904.356.4483
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Please note: The purpose of this website is to provide general gift, estate, and financial planning information. The Community Foundation for Northeast Florida is not engaged in providing legal or tax counsel. For advice or assistance in specific cases or whether to make certain a contemplated gift fits well into your overall circumstances and planning, the services of an attorney or other professional advisor should be obtained.

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