Charitable annuities are traditionally set up by a grantor who gifts a sum of money to a trust established with a charitable organization as the beneficiary. The trustee of the trust then purchases an annuity with the funds and pays the grantor a sum of money based on an amount specified when the gift and trust are established.
The grantor receives a tax deduction for the gifted amount and can carry the deduction to future years of the entire deduction reduces income tax liability to zero.
Upon the passing of the grantor, any remaining funds in the trust are then given to the charitable organization.
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The grantor receives a tax deduction for the gifted amount and can carry the deduction to future years of the entire deduction reduces income tax liability to zero.
Upon the passing of the grantor, any remaining funds in the trust are then given to the charitable organization.