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9/06
- Christ Church Planned Giving
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John and Penelope Consider Charitable
Gift Annuity as a Way to Give Back
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Our broken world desperately needs the Good News that God has given us through the Gospel of Jesus Christ. The Church can be an effective vehicle to deliver that message only when it has inspired leadership and ample resources. A sustained gift for your parish is one of the most important legacies you can leave. Now is the time to discuss this opportunity to serve God. To join in an authentic conversation about our ultimate stewardship in gratitude for God’s grace in our lives, to set reasonable goals and to realize that we may never know the success of our efforts.
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Consider the case of John and Penelope Episcopalian. John and Penelope (both age 65) have received enormous spiritual nourishment from their 20-year membership at Christ Church. They have adopted the view that spiritualism is part sharing and they want to give back to God through their church. John and Penelope have remembered the church in their wills. However, they felt they would derive much more satisfaction by making a gift while still alive and active. They knew their church had increasing needs, but were uneasy about whether a large gift would detract significantly from their retirement income.
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Consulting their lawyer, they found that a gift to the church through a Charitable Gift Annuity would allow them to keep their retirement income while still giving something back. John and Penelope chose to give $100,000 of appreciated stock (with a tax basis of $50,000) to the church through a Charitable Gift Annuity, and they would incur a number of personal benefits from the gift as well.
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1. They would receive an annuity payable to them of 5% per annum,
or $5,000 a year throughout the lifetime of the surviving spouse.
2. Part of the annuity income is free of federal taxes.
3. They would receive a charitable deduction on their federal tax
return in 2006, the year of their gift. In this case it was $30,000.
4. Had they sold their securities, the $50,000 of capital gain would
have created a tax liability of $7,500 (15% of $50,000). With the
Charitable Annuity, capital gain will be taxed over their expected
lifetime or at the rate of $179 per year.
5. While John and Penelope knew they would feel warmly about their
gift to others, they also found their financial position not
adversely affected.
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A Charitable Remainder Trust is a vehicle that allows a donor to retain the right to income during his/her lifetime or for some other period while transferring eventual ownership to a charity. By structuring the trust to pay out its income for his/her life and/or the life of his/her spouse, a donor can use a Charitable Remainder Trust to supplement retirement income. In fact, for taxpayers who want to incorporate charitable contributions into their retirement and estate planning, Charitable Remainder Trusts may compare favorably with qualified plans as retirement vehicles.
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Charitable Remainder Annuity Trusts (CRATs) and Charitable Remainder Unitrusts (CRUTs) have the same key tax benefit—they can remove low-basis, high-value property from the transferor’s possession without recognition of a gain or loss, while at the same time allowing the donor to retain an income stream, which is enhanced by the charitable deduction. However, which one is more beneficial depends on the goals of the owner. We invite you to consider a charitable gift to Christ Episcopal Church.
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Contact one of the Members of the Planned Giving Committee
for further information.
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Alan West, Chairman
Jim Clauson
Greg Daoust
Charley Ferrone
Joe Leghorn
Duff Lingard
Harding Ounanian, Jr.
Peter Tower
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