Planned Giving Insights and Information

New York Maximum Annuity Rates Have Increased Significantly

(Updated February 13, 2024) Governor Hochul signed New York Bill A4599a on October 25, 2023. The new law revises how New York computes its maximum annuity rates for gift annuities issued to New York residents and went into effect 90 days after signing, which is to say, on January 23, 2024. New York has now published the maximum rates applicable for gift annuities funded January 1, 2024 – January 22, 2024, during which the old method still applies, and for gift annuities funded January 23, 2024 – June 30, 2024, during which the new method applies. (The new law calls for updating the New York rates semiannually rather than quarterly.) As expected, switching to the new method increases New York’s maximum annuity rates significantly. The table below compares old and new New York maximum rates with American Council on Gift Annuities (ACGA) suggested maximum annuity rates over a range of typical gift annuitant ages. The columns on the far right show that New York’s new single life maximum...

Gift Annuity Voluntary Termination – What to Do and How to Do It

If you have an annuitant who finds their gift annuity income “nice, but not necessary,” they may be interested in voluntarily giving up their right to future annuity payments. Voluntarily releasing, or terminating, their interest in a charitable gift annuity (CGA) allows the charity to access the residuum early. The charity can also count part of the released amount as a new outright gift. Voluntary termination is also an effective way of managing the issue of a CGA that is wasting. An annuitant who is charitably inclined may agree to terminate their annuity to spare the charity the continued expense of paying the annuity from general operating funds.

Analysis of the New 2024 ACGA Annuity Rates

On November 22, 2023, the American Council on Gift Annuities (ACGA) informed its members that it would be increasing its suggested maximum annuity rates, effective January 1, 2024. The ACGA made its 2024 rates public earlier today, December 26. The 2024 rates replace the rates that became effective January 1, 2023. The ACGA’s decision to increase its suggested maximum gift annuity rates was triggered by the sharp rise in interest rates between May and November 2023. A net investment return assumption of 4.75% underlies the ACGA’s 2024 rates, an increase from 4.25%.

From the IRS: Donors Can Give More and Pay Less in 2024

The IRS has announced increases in tax exemptions, qualified charitable distribution (QCD) gift limits, and standard deductions for 2024. Gift planners will want to pay particular attention to how these changes impact their donors.