Foundations of Sharp HealthCare

Planned Gifts: Gift Annuities

Charitable gift annuities offer individuals the security of knowing what their monthly income will be for the rest of their lives while allowing them to support the causes that touch them most deeply, like critical health care programs and services at Sharp.

A charitable gift annuity is a contract between an individual and a charitable institution in which the donor transfers cash or other assets, such as securities, bonds or mutual funds, to the institution. In exchange, donors receive regular payments of a guaranteed amount throughout their lifetime.

The payment amount is determined by the donor's age when the annuity is initially funded. The higher in age a donor is, the higher the rate, and vice versa. Current rates begin at 4 percent for an annuitant at age 55, and reach a limit of 9 percent for someone 90 years of age or over. Once the payment is determined, it remains fixed for the donor's lifetime.

Donors also receive an income tax deduction in the year the gift is made, and the portion of each monthly payment that represents principal will be tax-free.

Some donors prefer to make a gift now but receive their income at a future moment when they are in a lower tax bracket; this is called a deferred gift annuity. This allows donors to take an immediate income tax deduction for the gift and specify a future date for the annuity payments to begin.

Individuals can also provide lifetime payments for a spouse or loved one by setting up a gift annuity in a will. The annuity becomes effective at the donor's death and the fixed payments begin immediately.

To learn more about charitable trusts and other planned giving opportunities, please contact Norm Timmins or Linda Spuck at 858-499-4816.