PG Calc Featured Articles

Flexible Deferred Gift Annuities – Choices for the Baby Boomers

How many of us “Baby Boomers” actually know when we’re going to retire? At this point, in our 50s and 60s, we’re likely reaching high points in our careers, in terms of earnings and fulfillment; or we have started completely new careers at midlife and have no intention of slowing down anytime soon. We’re healthier and more active than our parents were at this age, and, with ever-increasing life expectancies, it’s reasonable to envision not only living into our 70s and 80s, but also, living well and remaining vibrant. Sure, we’ll have Social Security (it won’t run out that soon, right?), but it won’t be enough to sustain our lifestyles, and we’ve watched the values of our retirement funds gyrate like roller-coaster rides over the past 10 years. Besides, we are the Boomers, the generation that kept refusing to grow up – we’ve finally learned to trust people over 30, but we’re nowhere near being “old enough to retire!”

Terms of Endearment for Charitable Remainder Trusts

What do you do when you run calculations for a charitable remainder annuity trust (CRAT) for one of your loyal donors, only to find that the trust fails the 10% minimum charitable remainder test or 5% probability of exhaustion test? One alternative would be to run similar calculations for a charitable remainder unitrust (CRUT) – because of the self-adjusting payment feature in a CRUT, it rarely fails the 10% minimum remainder test, and you don’t have to worry about the likelihood of exhaustion at all.

Peaceful Surrender: Charitable Contributions of Life Interests

It may seem too good to be true, but the beneficiary of the life interest in a planned gift – if he or she is inclined to do so – is typically free to end the arrangement ahead of schedule by letting the charity become the new owner of the interest in question. Recognizing that there are potentially a number of details to be addressed (as covered in our June 2012 eRate featured article), what follows is a quick review of the possibilities. To view and/or print a copy of this article, click this link::

The Tax Man (Surely Will) Cometh: Modeling before-tax and after-tax consequences of life income gift arrangements

When preparing illustrations for prospects interested in establishing life income charitable gift arrangements, projections of future benefits can complicate modeling income projections. From a tax perspective, categorization of income from gift annuities and charitable remainder trusts depends on a number of factors. Some of the income may be reported as ordinary income, to be taxed at the donor’s highest marginal income tax bracket, while some of the income may be reported as realized capital gains and taxed at a much lower rate. A portion of the income may even be considered to be return of principal, which is by definition tax-free. The gift-planning professional may find it helpful to illustrate the consequences of the gift arrangement from both the before-tax and after-tax perspectives. Doing so may help the donor understand the potential benefits of a complex charitable gift arrangement.

Surprise Gifts from Dead People (The Challenges and Rewards of Testamentary Gift Annuities)

You’ve just received a letter from an attorney representing the estate of a recently-deceased gentleman who was a longtime, generous supporter of your charity. The letter says that the decedent included a provision in his will for a gift of $100,000 to your organization – that’s great news, right? But wait - there’s a catch! The bequest is to be used to establish a charitable gift annuity to benefit the sister of the decedent; this is known as a testamentary charitable gift annuity. So what do you do now? How do you get information about the sister? What’s the date of the gift? How much are you supposed to pay her? When are you supposed to start paying her? And who will sign the gift annuity agreement now that the donor is deceased?

Gift Annuities When the Annuitant Is Not the Donor

Most donors choosing to establish gift annuities want to benefit the charity while also creating a certain stream of payments for themselves. Nevertheless, annuity payments can be made to any one or two persons regardless of their relationship to the donor(s). Just Who Is the Donor Anyway? The charity should be clear on the identity of the donor. For starters, the charity should be clear on the identity of the donor. For example, gift annuities are frequently established by married couples using jointly-owned or community property.

Are Strong Markets Good News for Planned Giving?

The leading stock market indicators finished extremely well in 2013.  The three most widely-quoted indices – the Standard and Poor’s 500, the Dow Jones Industrial Average, and the NASDAQ Composite – all had annual total returns in excess 30%.  These results come on the heels of strong performances in 2012.  What do two years of positive returns indicate for planned giving?


A Post-IRA Charitable Rollover Survival Guide

The sun has now set on the IRA charitable rollover for the fourth time. Naturally, we all hope it will soon rise again, ideally in a permanent fashion and with a new brilliance that shines not only on outright transfers but also on life income arrangements. Nevertheless, by no means should we regard ourselves as having been plunged into darkness. On the contrary, we continue to have a number of options we can – and should – be encouraging donors to consider.

Undeserved Neglect: The Installment Bargain Sale


A donor approaches your organization to gauge its interest in purchasing a building he owns next door. Your organization is interested, but cannot afford to pay market price for it. The donor is willing to consider making part of the transfer a charitable gift, but wants to receive some immediate financial benefit, too. What should you suggest?