Gifts that Return Income

Certain charitable vehicles can provide you with a life income with the remainder going to charity. These options ensure an income stream for you and/or your designated beneficiaries and then will leave a residual gift to United Way. They also provide you with the opportunity to prioritize the benefits of stability, simplicity and flexibility.

Charitable Gift Annuities

For donors seeking a stable and predictable annual income from their charitable gift, a Charitable Gift Annuity is commonly a good option. This type of annuity is basically a contract between you and United Way. The donor makes an irrevocable gift of cash, stock or another approved asset and, in return, United Way agrees to pay a fixed annual sum, or annuity, to the donor and/or beneficiary for life. The older the annuitant, the greater the interest rate paid and the higher the guaranteed fixed payment.

Charitable Remainder Trusts

Designed for more substantial gifts than Charitable Gift Annuities, a variety of Charitable Trusts are available to suit different donor requirements. A Charitable Remainder Trust can be created either as an Annuity Trust or Unitrust. In either case, if a donor creats a Charitable Remainder Trust during his/her lifetime, the donor is allowed an immediate income tax deduction for the present value of the charitable remainder interest. If the trust is created at the donor's death (for the benefity of another income beneficiary), the donor's estate is entitled to an estate tax charitable deduction for the present value (at the donor's death) of the charitable remainder interest.

Charitable Remainder Annuity Trust (CRAT)

For donors preferring a fixed annual payment, an Annuity Trust would be a good option. The annual payment to the donor (or other income beneficiary) is a fixed dollar amount and is not dependent on the value of the trust. No additional gifts may be to the Annuity Trust after its initial funding.

Charitable Remainder Unitrust (CRUT)

For donors preferring more flexibility, the Unitrust might be the right choice. The annual payment to the donor (or other income beneficiary) is equal to a fixed percentage of the value of the trust assets, as redetermined each year. As the value of the trust changes, the annual payment also changes (which can provide some protection against future inflation). The other important distinction is that it is possible to make additional deductible gifts to a Unitrust after initial funding.

Charitable Lead Trust (CLT)
A Charitable Lead Trust is essentially the opposite of a Charitable Remainder Trust, in that the "income" interest is paid to United Way for a specific term of years, and the remainder interest then passes to family members. A Charitable Lead Trust is usually created at the donor's death, and the donor's estate is entitled to an estate tax charitable deduction for the present value (at the donor's death) of the income payments to be made to United Way during the term of the trust.