The following are some brief descriptions of several financial tools that can allow you to make substantial gifts to EFC-ER while realizing tax savings. Every estate plan is unique, for specific recommendations for achieving your goals, please contact EFC-ER.

1. Charitable Gift Annuities

A Gift Annuity is a contract through which you make a gift to EFC-ER. Key features:

  • Guaranteed annual income begins immediately
  • Contract can name one or two persons to receive annuity income for life
  • Substantial portion of income is tax-free
  • Generous charitable contribution deduction on federal income taxes
  • Partial avoidance of capital gains taxes
  • Reduction of federal estate taxes
  • Reduction in administrative costs
  • Funded with cash, securities, or real estate
  • Minimum $1000 gift amount
  • Standardized rates set by the American Council on Gift Annuities; your rate depends on your age at the time of the gift.

2. Deferred Payment Gift Annuities

A deferred annuity is similar to a regular Charitable Gift Annuity, except that you choose to begin receiving your annuity income at least one year AFTER you make the gift. In return you get a higher annuity rate.

3. Charitable Remainder Annuity Trusts

A charitable remainder annuity trust ("annuity trust") is a gift plan defined by federal tax law that allows you to provide income to yourself or others while making a generous gift to EFC-ER. The income may continue for the lifetimes of the beneficiaries you name, a fixed term of not more than 20 years, or a combination of the two.

As an annuity trust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, Evangelical Friends Church-ER or a bank trust department).

During the trust's term, the trustee invests the trust's assets. Each year, the trustee distributes a fixed dollar amount to your income beneficiaries. The payments must be between 5% and 50% of the trust's initial value and are made out of trust income, or trust principal if income is not adequate. Payments continue until the trust term ends or until the highly unlikely event that the trust distributes all its assets. Payments may be made annually, semiannually, or quarterly.

When the annuity trust term ends, the trust's principal passes to EFC-ER, to be used for the purpose you designate.

Benefits Include:

  1. You will qualify for a federal income tax deduction. Note that deductions for gifts of long-term appreciated property will be limited to 30% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, take unused deductions of either kind over the next five years, subject to the same 30% or 50% limitation.
  2. The income beneficiaries you name will receive annual income for life, or for the period you designate.
  3. If you fund the trust with an appreciated asset and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on all the capital gain realized in the sale.
  4. Your estate may enjoy reduced probate costs and estate taxes.
  5. You will provide generous support of Evangelical Friends Church-ER.
  6. Your gift will benefit from expert asset management, provided by the same professionals who manage Evangelical Friends Church-ER's endowment.

4. Charitable Remainder Unitrusts

A charitable remainder unitrust ("unitrust") is a gift plan defined by federal tax law that allows you to provide income to yourself or others while making a generous gift to Evangelical Friends Church-ER. The income may continue for the lifetimes of the beneficiaries you name, a fixed term of not more than 20 years, or a combination of the two.

As a unitrust donor, you irrevocably transfer assets, usually cash, securities, or real estate, to a trustee of your choice.

During the unitrust's term, the trustee invests the unitrust's assets. Each year, the trustee distributes a fixed percentage of the unitrust's current value, as revalued annually, to your income beneficiaries. If the unitrust's value goes up from one year to the next, its payout increases proportionately. Likewise, if the unitrust's value goes down, the amount it distributes also goes down. For this reason, it may be to your advantage to choose a relatively low payout percentage so that the unitrust assets can grow, which in turn will allow the unitrust's yearly payments to grow.

Payments must be between 5% and 50% of the trust's annual value and are made out of trust income, or trust principal if income is not adequate. Payments may be made annually, semiannually, or quarterly.

When the unitrust term ends, the unitrust's principal passes to EFC-ER, to be used for the purpose you designate. You may add funds to your unitrust whenever you like.

Benefits Include:

  1. You will qualify for a federal income tax deduction. Note that deductions for gifts of long-term appreciated property will be limited to 30% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, take unused deductions of either kind over the next five years, subject to the same 30% or 50% limitation.
  2. The income beneficiaries you name will receive annual income for life, or for the period you designate.
  3. If you fund the trust with an appreciated asset and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on all the capital gain realized in the sale.
  4. Your estate may enjoy reduced probate costs and estate taxes.
  5. You will provide generous support of Evangelical Friends Church-ER.
  6. Your gift will benefit from expert asset management, provided by the same professionals who manage Evangelical Friends Church-ER's endowment.