Increasing interest rates and charitable gift annuities–a winning combination?

Amy Jordan |

Rising interest rates and charitable gift annuities–a winning combination?

Wealth planning priorities are impacted by interest rates. Charitable components of estate and financial plans are no exception. For example, charitable gift annuities are becoming more attractive to philanthropic clients. Thanks to the recent increase in rate of return assumptions for charitable gift annuities, this planned giving vehicle is now more attractive to clients who like the idea of a higher payout rate for their lifetime annuity.

Charitable remainder annuity trusts–also a perk with rising rates?

Creating a charitable remainder annuity trust in a high interest rate environment, versus a low interest rate environment, drives down the present value of your client’s income stream, which means that the value of the remainder passing to charity is relatively high and therefore so is the client's up front tax deduction for the charitable portion of the gift. 

More reasons to love the QCD

Qualified Charitable Distributions are already an amazing planning tool for your charitable clients who are over the age of 70 ½. As you know, the $100,000 QCD allowance from a client’s IRA counts toward satisfying the client’s Required Minimum Distribution and avoids the income tax on those funds. Plus, those assets are no longer part of a client’s estate at death, which avoids estate taxes, too. What’s more, the QCD may get a boost if the EARN Act becomes law; proposed bipartisan legislation would expand the QCD rules to allow a one-time, $50,000 QCD to a split-interest trust such as a charitable remainder trust. 

Hudson Community Foundation is a public charity and able to accept Qualified Charitable Distributions.  We have solutions for your clients!

With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on your preferred platform at any amount. Assets stay under your management. You can provide your clients with the consistent investment advice they expect.  We are your partner in charitable giving!

The team at HCF is a resource as you serve your philanthropic clients. We understand the charitable side and are happy to serve as a secondary source as you manage the primary relationship with your clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.