Annuities and Trusts
Many donors are interested in establishing a charitable legacy while creating, or enhancing, a current income stream. The Erie Community Foundation has significant experience with all planned giving options including Charitable Gift Annuities (CGA’s), Charitable Remainder Trusts (CRT’s) and Charitable Lead Trusts (CLT’s).
Planned giving alternatives can make great sense for you, your heirs and for favored charities. While all donors should consult their personal financial advisors prior to making a significant planned gift, the following general overview can help determine which pathway is best for you.
Charitable Gift Annuity
This is a simple contract between you and The Foundation which guarantees a fixed lifetime income for you and/or a second beneficiary in return for a one-time gift. You will receive an immediate charitable income tax deduction. Capital gains, if any, are spread out over the life of the annuity contract. The charitable remainder will perpetually support a favored cause or organization. CGA’s normally require a minimum of $10,000. The Erie Community Foundation has issued scores of CGA’s; including one valued at over $700,000.
Charitable Remainder Trust
This is a separate legal entity. ECF can serve as trustee of a CRT or as beneficiary. Income can be a fixed percentage or a fixed dollar amount. Start-up and on-going administrative costs generally dictate that CRT’s are established with gifts of at least $100,000. The charitable remainder can flow to The Erie Community Foundation and be used to create an endowment to support a favored cause or organization in perpetuity.
Charitable Lead Trust
This is also a separate legal entity. Charities receive income from the trust for a specified period with property eventually reverting back to the donor. CLT’s are normally used for more substantial gifts and estates.
Some Other Options
Everyone should have a valid will. You can leave a specific amount, or percentage of the remainder, to The Erie Community Foundation to support your favored cause or organization in perpetuity. Planned gifts, coupled with life insurance, can often help replace and maintain family wealth. Certain donors might also consider gifting a personal residence while maintaining rights to stay there during their lifetimes.