Life Income Gifts

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Charitable Gift Annuity Deferred Payment Gift Annuity Pooled Life Income Fund Charitable Remainder Trust

The annual return from a life income gift is often significantly higher than the income produced by the asset used to fund the gift. You also may reduce your income taxes now and taxable estate later. Annuities, pooled life income funds, and charitable remainder trusts are examples of life income gifts, each with their own unique benefits.

Immediate Payment Charitable Gift Annuity
In return for your contribution, the College promises to pay you, or someone you name, a fixed and guaranteed annual income for life. In most cases, the gift portion of your annuity immediately benefits the College and is designated to an area of your choosing, including the Alumnae Annual Fund.

Rates of return currently range from 5.7 percent for a beneficiary aged 60 to 11.3 percent for age 90.

Minimum age to establish an immediate annuity: 60

Deferred Payment Gift Annuity: Charitable Version of an IRA
The longer you elect to defer receipt of your annuity income, the higher the guaranteed income will be. In most cases, the gift portion of your annuity immediately benefits the College and is designated to an area of your choosing, including the Annual Fund.

Rates of return currently range from 21.0 percent for age 40 to 7.6 percent for age 60, based on payments beginning at age 65.

Minimum age to establish a deferred payment gift annuity: 40

Deferred payment annuities require first payment to be no earlier than age 60. 

Annuity Benefits:
Potentially favorable capital gain tax treatment and higher income, reduced estate taxes, and an immediate charitable income tax deduction.

Minimum gift amount for annuities:

• $10,000 for either one or two annuitants
• $5,000 for each additional annuity
• Fund gifts with cash, securities, CDs, mutual funds, and marketable real estate

Steva L. Stowell-Hardcastle DVM ’85: Deferred Annuity Donor
	“I attended my first college fair as an MHC alumnae representative last week. I spoke with pride, confidence, and excitement about the opportunities that MHC has for talented young women. I can’t think of a better gift to ensure that MHC continues its long, rich history of educating women than my donation of stocks.”

Pooled Life Income Fund
Your contribution is added to the gifts of other donors for investment purposes. You, or your named income beneficiary, receive annual interest and dividend income based on your pro rata share of the fund’s units. At the end of the lifetime of the income beneficiary, the value of your units in the fund will be used by Mount Holyoke according to your gift designation.

The Elizabeth Mead Fund is invested in a mix of stocks and bonds for long-term growth of principal and income. The investment goal of the equity portion is to exceed the return of the S&P 500 Index. The investment goal of the bond portion of the portfolio is to consistently exceed the return of the Lehmann Aggregate Bond Index.

The Mary Woolley Fund is invested in high quality, fixed-income securities and seeks as high a rate of current income as is consistent with prudent risk for its beneficiaries. The investment goal is to consistently exceed the return of the Lehmann Aggregate Bond Index.

Minimum age to establish a pooled income agreement: 55

Benefits:
Receive an immediate charitable income tax deduction. When using long-term highly appreciated securities, you completely avoid capital gains taxes. Estate taxes may be reduced.

Minimum gift amount:

• $10,000 for a gift to benefit either one or two beneficiaries
• Additions to pooled funds require a minimum contribution of $2,500. 
• Fund gifts with cash, securities, CDs, and mututal funds

For rates, please see gift calculator or contact the Office of Gift Planning at 800-MHC-GIVE.

Charitable Remainder Trust Your gift is placed in a trust managed by Mount Holyoke or a designated trustee and managed to produce annual income for you and, perhaps, for another beneficiary. Each trust is donor specific and managed separately. At the trust’s termination, what remains is transferred to Mount Holyoke for your designated purposes. The annual payments from the remainder trust differ according to the type of trust you establish. An annuity trust pays the same fixed dollar amount, each year. This annual amount is determined when the trust is established and must be at least 5 percent of the initial fair market value of the trust’s assets.  Benefits of the annuity trust: Cash and marketable securities can be used to establish a trust. Provides an immediate charitable income tax deduction, capital gains benefits, and possible estate tax benefits.  Trust may also be structured so that your income is tax-free. You can count on the security of fixed income during uncertain times. Currently, typical annuity trust returns range from 5 percent to 6 percent, depending on the terms of the trust. A unitrust is the more flexible of remainder trusts.  It pays a variable amount, each year. The amount is equal to a predetermined percentage of the fair market value of the trust in any given year.  Plus, the trust’s investment strategy can be structured to suit your current income needs and modified over time as your needs change. Benefits of the unitrust: A unitrust is an excellent vehicle for gifts of marketable real estate, closely held stock, and long-term appreciated securities as well as cash. Provides an immediate charitable tax deduction, capital gains benefits, and for larger estates, estate tax benefits. Generates growth and income. The trust can also serve as an excellent hedge against inflation because your annual income will grow with any increase in the trust’s market value. Currently, typical unitrust returns range from 5 percent to 7 percent, depending on the terms of the trust. Gift minimum is $100,000.