Gifts That Pay Income
A gift that pays income such as a charitable gift annuity (CGA) or charitable remainder trust (CRT) is a great way to take care of your loved ones as well as the University of North Dakota. With payments to you and future funds to the UND Foundation, gifts that pay income can help you meet your financial and charitable goals.
Charitable Gift Annuities
Alumni and friends age 55 and older who fund a CGA receive an income tax deduction and fixed payments for life, a portion of which may be tax-free. A CGA may benefit you and/or your spouse. It combines tax savings with the ability to produce payments for you. The amount of the annuity payment will depend on your age and the value of the assets donated.
Minimum Requirements
- $10,000 minimum gift
- $50,000 allows a donor to designate the remainder to a specific UND area
- $100,000 allows a donor to designate the remainder to establish a new named endowment for a specific UND area
- Age 60+ for an immediate gift annuity
- Age 55+ for deferred gift annuity, with payments to begin at 60 or later
- 2-life maximum
Two Ways to Receive Payments
- Each year the annuity trust pays you the dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.
- Each year the unitrust pays you a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.
Advantages
- Income: Create a lifetime fixed income stream for yourself and/or your spouse. A CGA pays income based on the initial value of the gift.
- Flexibility: You may use cash or appreciated stock to fund the gift. You may also choose to receive monthly, quarterly or other payments.
- Charitable deduction: You will receive an income tax deduction in the year you make the gift, with an additional five years to carry forward any unused deduction.
- Estate tax savings: You may reduce estate taxes that your heirs might have to pay by removing assets from your estate prior to your death.
- Satisfaction: You will know that you are benefiting future generations of University of North Dakota students and educators. Your payments are fixed on the date of your gift, so they will never change even if interest rates or the stock market fluctuates.
Payment for a $10,000 gift
These figures are the suggested rates for a single beneficiary. For more information, please contact us.
| Age | Rate (%) | Annuity |
|---|---|---|
| 60 | 5.2 | $520 |
| 65 | 5.7 | $570 |
| 70 | 6.3 | $630 |
| 75 | 7.0 | $700 |
| 80 | 8.1 | $810 |
| 85 | 9.1 | $910 |
| 90 | 10.1 | $1,010 |
Charitable Remainder Trusts
A CRT combines tax savings with the ability to produce payments for you or your family members. Charitable remainder trusts are especially helpful for retired people who would like to sell land, stock or other appreciated assets tax-free and receive generous payments.
Minimum Requirements
- $100,000 minimum gift
Advantages
- Income: Create an income stream for yourself, spouse or other loved ones. A charitable remainder trust pays income based on a fixed percentage (e.g. 5 percent) of the trust assets as valued each year.
- Flexibility: You can use land, mineral interests, appreciated stock,or a variety of assets to fund this gift. You can choose lifetime or a term of years to receive payments and payment options of quarterly or annually.
- Avoid capital gains tax: You can eliminate immediate capital gains on the sale of appreciated assets, such as stocks, bonds, and real estate.
- Charitable deduction: You will receive a charitable income tax deduction in the year you make the gift, with an additional five years to carry forward any unused deduction.
- Diversification: Assets used to fund the trust will be placed into a diversified portfolio managed by professionals.
- Estate tax savings: You may reduce estate taxes that your heirs might have to pay by removing assets from your estate prior to your death.
- Satisfaction: You will know that you are benefiting future generations of UND students.
This information is provided as an educational service to our donors and is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. State law may further impact your individual results.