PLANNED GIVING

Office of University Advancement
284 Rose Administration
Box 870122
Tuscaloosa, AL 35487
phone: (205) 348-4767
toll-free: (888) 875-4438
fax: (205) 348-8871
mailbox@advancement.ua.edu

Charitable Gift Annuities

UA students near the entrance to Tuomey Hall Charitable gift annuities are an extremely flexible way to make a gift. They can be designed to provide a fixed income for life for you and/or others you choose. They can be created with gifts of relatively modest amounts.

For example, you can make a gift through a charitable gift annuity for as little as $10,000. Here's how a University of Alabama charitable gift annuity works:

You transfer cash or other assets to the University of Alabama's Capstone Foundation to establish your gift annuity agreement. This involves completion of a simple agreement and can be handled conveniently by mail, if you wish.
You'll receive generous fixed payments annually (or more frequently if desired) that will never vary in amount. The amount of your payment is a percentage of your gift determined by your age and other factors at the time your gift is funded.
Because your gift is irrevocable, you will be entitled to an immediate income tax charitable deduction. In addition, part of each annual payment is tax-free for the period of time equal to your life expectancy.
If desired, you can also choose to name another person (typically a spouse, parent, or sibling) to receive payments with you, instead of you, or following your lifetime for the remainder of his or her life.
The assets used to fund your gift annuity will generally be removed from your estate for tax purposes.
You make a significant gift to The University of Alabama for a portion of the amount used to establish your gift annuity agreement.

Many persons choose to fund a new gift annuity with the University each year. Since payment rates increase with age, each gift annuity generally brings larger annual payments.

When property, such as stock, that has increased in value is given for a gift annuity, part of the capital gain tax that would normally be due on its sale can be avoided at the time of the gift, and a portion of the gain can be reported over the annuitant's life expectancy. The use of appreciated, low-yielding assets to fund a gift annuity can thus be an excellent way to completely bypass capital gain tax at the time of your gift, enjoy a current income tax charitable deduction, and gain the advantage of reporting a portion of each payment at lower, more favorable capital gain tax rates for a number of years.

Current gift annuity rate schedule.

For example: Maureen, 75, decides to give $10,000 for a University of Alabama gift annuity agreement. The payment rate at her age is 6.7%. She will thus receive a payment each year of $670 for life and a tax deduction of over $4,400 for the year of her gift.

In addition to the income tax deduction, almost two-thirds of each annual payment will be received free of tax for the first 12 years of her payments.

If Maureen had wished, she could have named her brother, age 70, to continue to receive annual payments for his lifetime in the event of her death. The payment rate and tax benefits in such a case would be somewhat less since the payments would be made for two persons' lives.

Amount transferred to UA — $10,000
Rate of payment to Maureen — 5.8%
Annual payment to Maureen and her brother for their consecutive lifetimes — $580
Immediate income tax charitable deduction — $3,143.20

Please use the Contact Planned Giving form or e-mail mailbox@advancement.ua.edu to request a personalized illustration of benefits of a gift annuity without obligation.

Information on gift annuities that make even larger payments beginning when you retire or at another future date you choose.

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