Charitable Trusts

A deferred charitable annuity is similar to a charitable annuity, in that a donor donates assets to a charity up-front. In exchange, the charity agrees to pay income to the donor for life, or alternatively, for a set term of years.

The difference with a deferred charitable annuity is that the payments do not begin immediately. Rather, they begin at a specified point in the future. Like other annuities, deferring payment often results in larger payments.

The exact amount of payment to be made will vary depending on the plan selected, your age, the date at which you would like to begin receiving payments, and various other factors. As a general rule, the longer you wait, the higher the payments will be. This is because the assets will be allowed to compound during the period that they are on deposit and not generating income.

This plan can work well for a person who is still in his or her working years, but wishes to generate income upon retirement. The annuity may be set up so that payments begin when the donor reaches retirement age, replacing some of the income lost from cessation of work.

Deferred annuities are also available from other providers, and may be set up in conjunction with a charitable remainder annuity trust. It is important to consider all options available before choosing a provider, as some providers may offer better terms than others.

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