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Trinity College - Hartford Connecticut

Planned Giving

Charitable Gift Annuity

A charitable gift annuity provides fixed payments for life in exchange for a gift of cash or securities to Trinity College. Gift annuities are easy to set up and the payments are backed by the general resources of Trinity College .  

charitable gift annuity could be right for you if:

  • You want to maintain or increase your income.
  • You want the security of fixed, dependable payments for life.
  • You want to save income taxes or capital gains taxes.
  • You would like income that is partially tax-free.
  • You want to make a generous gift to Trinity.
  • You are considering a gift amount of $10,000 or more.
  • You are at least 60 years of age.
 

 

How Your Gift Helps

Your gifts to Trinity College help to continue its mission of preparing students to be bold, independent thinkers who lead transformative lives. It will provide Trinity College with the resources to…

expand access to students of promise.
sustain the excellence of our faculty.
revitalize our physical environment.

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A simple contract
A charitable gift annuity is a simple arrangement between you and Trinity College that requires a one or two page agreement. You will incur minimal or no costs to establish the arrangement and no costs at all to maintain it.  

Irrevocable gift 
A charitable gift annuity is an irrevocable arrangement. Once you transfer assets in exchange for the gift annuity, you cannot change your mind and get the assets back. This requirement assures that whatever is left of your gift when the gift annuity ends will go to support Trinity.

Fixed payments for life
In exchange for your irrevocable gift of cash, securities, or other assets, Trinity will pay you a fixed amount each year for life. The amount of the payment depends on the amount donated and the age of the payment recipient.  

  1. Payments last for your lifetime. You cannot outlive your payments.
  2. Payments are predictable. Your payments will not be affected by investment performance or market conditions. You will get the same amount each year. 
  3. Payments are very secure. They are backed by the general resources of Trinity College, not just by the assets you donate.

Tax-advantaged payments
Part of each payment typically will be tax-free for many years. This tax-free portion makes the payments more valuable than an equal amount of fully taxable income. The amount of this tax-free portion will be greater if you give cash than if you give stock or other appreciated property.

Who can receive payments?
You decide who will get the payments from your gift annuity. Usually, this will be you, or you and your spouse. Alternatively, you can select one or two other people to receive the payments from your gift annuity. For example, you may wish to provide income for parents, a sibling, or a faithful employee. 

Payout rate depends on age
The older you are when you make your gift, the greater the payment rate you will receive. If you choose other people to receive the payments from your gift annuity, their ages at the time of your gift will determine their payment rate. Our minimum age for a payment recipient is 60.

Sample Annuity Rates for Gift Amount of $10,000

Age Payment Rate Annuity Deduction

65

4.7%

$470

$3,490

70

5.1%

$510

$4,099

75

5.8%

$580

$4,577

80

6.8%

$680

$5,021

Tax benefits
You will earn an income tax charitable deduction in the year of your gift. If you cannot use the entire deduction that year, you may carry forward your unused deduction for up to five additional years. 

If you give stock or other appreciated property to create a gift annuity, you will pay tax on only a portion of your capital gain in the property. Even better, if you are the payment recipient of your gift annuity, you will be able to report this capital gain in installments over many years. In this case, your capital gain income will replace some of the tax-free portion you would receive if you were to give cash.

By removing the gift assets from your estate, you may also reduce future estate taxes and probate costs.

Assets to consider
Cash currently held in a savings account, bank CD, or money-market fund makes an excellent funding asset. Usually, a gift annuity will provide you with larger payments than any of these investments.

Securities, especially highly-appreciated securities that you have owned for one year or more, are also an excellent funding asset. Giving them to us in exchange for a gift annuity will allow you to unlock their value to increase your cash flow and avoid substantial capital gains tax at the same time.

Example

Abraham Thomas is a 71 year-old widower. He would like to make a significant gift to Trinity College, but he is dependent on the income produced by him investments. One of these investments is stock in XYZ Widget Corporation that he and him late wife purchased many years ago for $3,000.

Him stock is now worth $10,000 but provides little income - about $121 after tax. Abraham is reluctant to sell him XYZ Widget stock to reinvest in higher yielding assets because he will have to pay $1,400 in capital gains tax. This would leave him with just $8,600 to reinvest.

Abraham is pleased to learn that he can make a significant gift to Trinity College and increase him cash flow by giving him XYZ Widget stock to Trinity in exchange for a gift annuity. He can also save substantial income taxes plus avoid and defer capital gains taxes at the same time.

  Tax result Cash flow before tax Cash flow
after tax
(39.6​% tax rate)

Abraham keeps his stock

None

$200

$121

Abraham sells and reinvests for 4.0% yield

Owes $1,400 capital gains tax

$344

$208

Abraham funds a 5.3% gift annuity

$4,108* income tax deduction
Avoid tax on $2,875* of capital gain

$530

$419

*Deduction amount and capital gains tax avoided may vary depending on the timing of the gift.

Personal Estate Planning Kit Request Form

Please provide the following information to view the materials for planning your estate.