Is this a charitable gift annuity?

Is this a charitable gift annuity?

Forum topic posted in Forum on 30 March 2012| 1 comments
audience: | last updated: 7 July 2012
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I have a client whose father entered into an agreement with a "charity" to donate cash (daughter thinks 100k) and to receive a deferred annuity of a certain monthly amount for 25 years.  Donor received a letter from charity indicating that his Bargain Sale transaction created a tax deduction in the amount of approximately $30,000.  Letter indicated that all payments would be made directly from an insurance company with the charity being the contract holder.  Payments were to begin in January and no payments were received.  Dad died in November and still had not received any money.  Wife, who predeceased, was named as beneficiary.  Kids are hoping that Dad's rev Trust will now receive not only payments he did not get, but remainder of annuity payments.  Ideally, they would like to receive his initial investment back and cancel the annuity, but don't know that they can do that.  Donor agreement says that if donor predeceases remaining payments can be made to beneficiary.  The annuity is a group annuity and it appears as though it may be considered a non qualified benefit plan, although donor never worked for charity.  Donor never met anyone from charity.  Sold to him by broker. Broker has not been helpful to the family, although children say he is well respected in community. Daughter indicates her father's charitable intent was most likely induced by the tax deduction.  Donor was 87 when agreement entered. 

I was a Planned Giving Officer 17 years ago and am now in private practice.  This is something new to me and it just does not sound quite right.  I am trying to determine what sort of arrangement would allow donor to receive an immediate tax deduction and be party of a group annuity with death benefits payable to a beneficiary.  I listed "charity" in quotation marks as I cannot find the charity on line and the Secretary of State's office in the state that is listed on the charity letterhead has no listing for such charity, although has one by a related name although purpose seems different.  Copy of letterhead from four years ago, does not list phone, email or web address, just a PO Box.

Any thoughts would be much appreciated!!

Liz

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Joined: 05/24/2007
Points: 105
Re: Is this a charitable gift annuity?

Liz,
I may be able to help with this. You can email me your contact info at efaulk@financialguide.com

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