September 16th, 2010

Life Estate Gift Annuity

Bequests and Endowments

Appreciated Securities

The Saint Francis Gift Annuity 

Take care of your financial future as you give to Saint Francis

• A new source of lifetime income, some of it tax-free
• Guaranteed security and high return
• A charitable income tax deduction if you itemize
• A partial savings on capital gains tax if you give appreciated stock or other assets
• Reduced estate taxes and probate costs.
• A larger charitable gift than you may have thought you could afford.

What is a charitable gift annuity?

A charitable gift annuity is similar in concept to a commercial annuity, which is a contract between an issuer (usually an insurance company) and an individual (the annuitant). The issuer agrees to pay a fixed dollar amount to one or more annuitants for life. The charitable gift annuity, however, has one important distinction: When you enter into a charitable gift annuity agreement with the Saint Francis Foundation, you purchase an annuity and at the same time make a charitable gift to Saint Francis. After the lifetime of the donor and any other annuitant, the Foundation uses the gift as the donor specifies.

As noted above, a remainder interest in your home can be assigned a value in today's dollars, which may be used to fund a charitable gift annuity. In return, the Foundation agrees to pay a fixed, lifetime dollar amount to one or two beneficiaries you select. You are entitled to an income tax charitable deduction in the year you make the gift, based on the difference between the value of the property contributed to Saint Francis and the current value of the lifetime annuity.

Sample Annuity Rates

Your Age	Annuity Rate
65	6.0%
70	6.5%
72	6.7%
74	6.9%
76	7.2%
78	7.6%
80	8.0%
82	8.5%
84	9.2%
86	9.9%
88	10.6%
90	11.3%

The age of the annuitant determines the amount, or annuity rate. The older the annuitant, the higher the rate. When an annuity provides income for two beneficiaries rather than one, the annuity rate is lower. As with all other charitable institutions in California that offer gift annuities to their donors, the Saint Francis Foundation files its rates with The California Department of Insurance.

When you make an irrevocable transfer to the Saint Francis Foundation of the remainder interest in your home, this portion of the arrangement is a gift. Accordingly, if you file an itemized income tax return that year, you can claim an income tax charitable deduction for the amount of the remainder interest. As with commercial annuities, a portion of each annuity payment is treated as a tax-free return of the donor's original investment and is not taxed. The staff of the Saint Francis Foundation is pleased to meet with you and provide confidential illustrations of the potential income and tax benefits of the Life Estate Gift Annuity Program.

When you transfer a remainder interest in your home, the value of that property has probably appreciated since you acquired it. Capital gains on a transfer of appreciated property to charity generally is not taxable. However, when you enter into a gift annuity agreement with the Saint Francis Foundation, you receive an annuity at the same time you make a charitable gift. The portion of gain attributable to the gift escapes capital gains taxation entirely, but you do realize a capital gain on the amount of appreciation allocated to the annuity portion. The capital gain realized with a Life Estate Gift Annuity is spread out over the actuarial life expectancy of the donor (or joint life expectancy of the donor and a second beneficiary) and reported annually as the annuity is received. If you establish the annuity solely for the benefit of one or more other person(s), you must report the capital gain entirely in the year the charitable gift annuity is established.

You may reduce estate tax liability by giving the Saint Francis Foundation a remainder interest in a home. The fair market value of the property at the date of your death is includable in your gross estate when you retain a life estate in the property. However, your estate is entitled to deduct that same amount as a charitable contribution (or if there is a surviving life estate owner, the estate can deduct the value of the interest held by Saint Francis). If the surviving owner is a spouse, the marital deduction may be utilized.

The Life Estate Gift Annuity Program represents only one of myriad ways to support Saint Francis Memorial Hospital and its mission of excellence. To explore the opportunities available, please contact the Foundation Office at (415) 353-6650. Our planned-giving professionals will work confidentially with you and your advisors to create gifts that blend your financial and personal objectives with the needs of Saint Francis.

In less than one minute over the phone or by email, Foundation President Bob Dureault can prepare a personalized Saint Francis Gift Annuity proposal designed especially for you--no obligation, in complete confidence.  The proposal will show you the specific benefits you will receive.  If you like what you see, we can quickly complete your agreement so you can begin receiving your annuity payments next month.  Email Bob or call him at 415-353-6654.