THE HERITAGE CLUB: GIFT ANNUITIES

The Heritage Club is an organization of CAF friends who share the long-term vision of the American Airpower Heritage Foundation (AAHF) and have established a planned gift for the future benefit of the organization.

A charitable gift annuity is one of several long-term investment strategies that benefit both the CAF and the Heritage Club Member. This gift is a contract between you and the CAF, whereby you transfer assets to us in exchange for our promise to pay you lifetime payments.

By choosing to donate through a gift annuity, you accomplish two things: First is the gift of donation to the CAF American Airpower Heritage Foundation. Second is the contract for a fixed payment to yourself or another individual of your choice. A charitable gift annuity pays you a predetermined amount each year for life. Cash, property or securities can be accepted as the gift, in return allowing fixed payments in regular intervals.

The most common annuity Heritage Club members choose is the Immediate Gift Annuity. The annuitant begins receiving payments within the payment period immediately following the contribution. Other options are available, including a Deferred Gift Annuity wherein the annuitant starts to receive payments at a future date chosen by the donor, a date which must be more than one year after the date of donation.

A portion of your gift can be itemized as a deduction on a tax return, allowing you to reduce the net cost of the gift. Based on the government rate for life expectancies, a portion of each payment you receive can be considered a non-taxable return of a portion of the gift, meaning part of each payment received is income tax free.

Life expectancy, gender and the number of annuitants will factor into your annuity rate. A minimum investment amount and a minimum age are required for this type of gift. These are questions the AAHF Heritage Club can answer with the help of your insurance provider or attorney as you determine the best course of action for your funds.

Benefits include:

   • Charitable Income Tax Deduction: The charitable income tax deduction varies according to your age and is taken in the year the gift is made.
  
   • Favorable Capital gains Treatment: If you make the gift with appreciated property, you generally avoid paying capital gains taxes on the gift portion of the transfer.

   • Tax-Free Portion: The payments you receive may be partially tax-free, whether they begin now or in the future. For gifts established with appreciated property, the payments will also be partially taxed at capital gains tax rates.

   • Lifetime Payments: You (and/or a second individual if you so designate) receive a fixed and secure amount for life. Generally, the older the donor, the higher the payment.

   • Estate Taxes:  If you are the sole annuitant, the payments cease at death and are not included as part of your estate. If your spouse is the remaining annuitant, his or her interest may qualify for the estate tax marital deduction. If an individual other than a spouse is the remaining annuitant, the value of the remaining payments is included in your estate for estate tax consideration.*

The Heritage Club has several gift annuities in place and welcomes your investment should you choose to make the CAF the recipient of your donation. Make an appointment with your financial planner, insurance provider, attorney and the CAF when you are ready to make your donation to “Keep Our Warbirds Flying.”

*Reference from American Council on Gift Annuities (ACGA) and Gift Planning data.