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%.

BDQ #3: The Assignment Revocation Rigmarole: A Gift Annuity Pushmi-Pullyu

The BDQ (Big Dumb Question) We’ve all been there: at some point during a presentation someone says, “This may be a dumb question, but…” and the presenter (hopefully in a gracious tone of voice) says, “There’s no such thing as a dumb question,” before providing the obvious answer. But sometimes, just to yourself, you have to admit you were wondering about the same thing. That’s the idea behind this occasional series we’re calling “The Big Dumb Question” (or BDQ). Our aim is to provide easy to understand answers to basic gift planning questions – the kinds of questions you may be reluctant to ask. We’ve got a list of topics in mind (see below). The Assignment Revocation Rigmarole: A Gift Annuity Pushmi-Pullyu The provisions of the “IRA Legacy Act” provide a limited opportunity for donors to make a qualified distribution in exchange for a charitable gift annuity. This new option comes with several constraints, including a requirement that the gift annuity contract cannot be...

Trust Matters: Life Income Gifts and Revocable Living Trusts

In our work with planned giving professionals, we receive questions from time to time about donors using trusts in conjunction with life-income gift arrangements. The most common question is whether charitable gift annuity (CGA) payments – or beneficiary payments from charitable remainder trusts (CRTs) – can be issued to trusts rather than directly to the annuitants or trust beneficiaries. But there is a second question that comes up as well – whether a trust can be the donor or grantor of a gift annuity or CRT.

BDQ #1: What Is a Charitable Gift Annuity, and Why Would a Donor Want One?

The BDQ (Big Dumb Question) We’ve all been there: at some point during a presentation someone says, “This may be a dumb question, but…” and the presenter (hopefully in a gracious tone of voice) says, “There’s no such thing as a dumb question,” before providing the obvious answer. But sometimes, just to yourself, you have to admit you were wondering about the same thing. That’s the idea behind this occasional series we’re calling “The Big Dumb Question” (or BDQ). Our aim is to provide easy to understand answers to basic gift planning questions – the kinds of questions you may be reluctant to ask. We’ve got a list of topics in mind (see below). Our very first BDQ is: What Is a Charitable Gift Annuity, and Why Would a Donor Want One? At the most basic level, a charitable gift annuity is simply a promise by a charity to pay a certain amount of money to someone each year for life. A charity makes this promise, in the form of a legal contract, in exchange for a charitable...