Financial Tool Explanations

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:

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:

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: