Life Income Gifts

Life Income Gifts provide you or your designated beneficiary an income for life in exchange for your gift.

They can be established in several ways, the most common of which includes the Episcopal Church Foundation’s Pooled Income Fund, a Charitable Gift Annuity, and a Charitable Remainder Trust.

In the Pooled Income Fund, gifts ($2,500 minimum) are “pooled” with other gifts and invested in a professionally managed investment portfolio. The donor receives the following benefits:

• A guaranteed income for life. The amount of the income depends on the rate of return on the fund’s investments. The income can also flow to another designated beneficiary.
• An immediate federal income tax deduction. The amount of the deduction is usually based on the age of the donor and/or beneficiaries.
• The elimination of capital gains taxes, if funded through appreciated securities such as stocks, bonds, mutual funds, or real estate.
• A possible reduction in estate taxes.

At the death of the final beneficiary, the property goes to the church or church-related beneficiary that you named.

The benefits of establishing a Charitable Gift Annuity are similar to that of the Pooled Income Fund with the following differences:

• The income for life is guaranteed at a fixed rate.
• A portion of the gift is deductible from income taxes.
• Some of the income received would be tax exempt.
• The minimum gift is $5,000.

A Charitable Remainder Trust involves larger sums of money ($100,000 or more) and is individually managed. Like the Pooled Income Fund and the Charitable Gift Annuity, the Charitable Remainder Trust provides income for life, an income tax deduction, relief from capital gains taxes (if funded through appreciated property), and a possible reduction in estate taxes. 

A Charitable Reminder Trust can be added to over the years, and a portion of the Trust can be set aside for growth as a hedge against inflation. The rate of return fluctuates based on the performance of the portfolio. If you are seeking a set rate of return annually, a Charitable Remainder Annuity Trust is an option to consider.

The Charitable Lead Trust, another estate planning tool, enables you to transfer assets to a trust that pays its income to St. Timothy’s or St. Timothy’s-related organization for a set period of time. At the end of the term, the principal and all capital appreciation returns to you or others that you name.