A Viable Option

Fred and Marie Wilson recently contacted the Evangelical Friends Mission Office last fall. They had heard about Charitable Gift Annuities and were curious to learn if creating such an agreement with EFM were possible. We were happy to tell that because of our relationship with the Mennonite Foundation we would be happy to help them set up such an agreement.

“We had several questions,” explained Marie. “questions about how such an agreement would work. We were pleased to learn that EFM has partnered with the Mennonite Foundation to provide the opportunity for us to make a gift to EFM and receive an income.”

The Wilson's questions included:

• What are the advantages of a CGA with EFM?

Some of these include:

Income tax benefits both now and in the future
A current income tax deduction
Continual income or life
With a two-life contract, life income for the survivor
No management or investment worries
Valuable advantages in the avoidance of estate taxes and probate costs
The knowledge that they are helping provide for the financial security of Evangelical Friends Mission

• How does such an agreement work?

When they set up the agreement, the contract was issued through the Mennonite Foundation, along with a Gift Designation Form that the Mennonite Foundation provided. The gift portion of their agreement will become available for use in carrying out EFM’s programs and projects. They have begun to receive income payments, which will continue as long as either one of them lives.

• Did our ages make a difference in the rate of return we are paid?

Yes, it did. Rates are actuarially determined, based upon ages and value of the property transferred. The Mennonite Foundation and EFM use the standard published rates per the American Council on Gift Annuities www.acga-web.org.

• Can we withdraw any of these funds at some point in the future?

No. The agreement is irrevocable. The terms of the annuity agreement were set at the time the agreement was signed. The terms of the agreement must be definite, to provide the fixed payments for life.

• Will our annuity be part of our estate?

Since you are husband and wife, the annuity goes directly to EFM via the Mennonite Foundation at the death of the survivor. The same is true for a single life annuity. If your joint-survivorship annuity were such that the survivor was not a spouse, a portion (based upon the survivor’s age) will be included in the estate. In each case, probate costs are avoided.

• Could we have purchased an annuity with stocks or property other than with cash?

Yes. This is often done. In many cases, the tax benefits are even greater if the stocks or property have appreciated in value.

The Wilsons were happy to be one of the first to create such an agreement between Evangelical Friends Mission and the Mennonite Foundation. While the name has been changed to protect the “Wilsons,” this is an example of an arrangement that has cemented the relationship between EFM and the Mennonite Foundation. If you would like more information, please contact us.