If you are considering a major gift, your gift of cash or stock in the form of a “Life Income Gift” can significantly increase your income!

A life income gift allows you to transfer assets, and yet continue to receive income from the cash, stock, or other property contributed.  A life income gift can allow you to:

1)      Increase your income for life

2)      Receive a generous charitable contribution

3)      If you contribute stock, avoid any capital gains on the appreciation

A life income gift is often made through a trust arrangement called a “unitrust” or an “annuity trust”.  With a unitrust, you and/ or your spouse (or another beneficiary) receives annually a fixed percentage of the fair market value of the assets in the trust.   The income will vary year-to year, based upon how the trust’s investments perform.  With an annuity trust, you and/ or your spouse (or another beneficiary) receives a fixed amount from the trust each year.  This amount is agreed upon when you create the trust; it stays constant, no matter what happens with the stock market or interest rates.

If you have already considered OLT in your will, please note that a life income gift can often be preferable.  Such a gift allows you to accomplish your philanthropic goals during your lifetime – and in a tax-advantaged way.