Charitable Gift Annuities
What do you do when you want to include the Catholic Church in your estate planning, but you would like to be assured of income for the rest of your life as well?
One answer is to set up a Charitable Gift Annuity with the Diocese of Madison. That's what Fr. Henry N. Kalscheuer, pastor of St. Joseph Parish in Dodgeville, did recently. The asset he transferred to the Diocese of Madison Charitable Gift Annuity guarantees him a specific payment each year for life. As a result of the annuity, $15,000 will go to the endowment fund at St. Joseph School, which Fr. Kalscheuer named as a beneficiary.
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Annuity benefits
"It's a way to provide continuous income for myself as long as I'm alive and still end up leaving money for the good works of the church," said the priest. He remarked that he wanted to have income to supplement his retirement benefits and his social security. Even if he should go to a nursing home, "they would be able to access the income from the annuity to take care of me, and when I die, the annuity would go to a charitable organization, in this case the diocese and St. Joseph School Endowment Fund."
Charitable Gift Annuities are especially good for priests because they do not have children who might need their support, the pastor said. He said in his case, his parents are no longer living and he only has one sibling, so he does not need to worry about leaving money to his family. "And I'm old enough now that I won't be spending that much on traveling," he said.
Although the Charitable Gift Annuity may benefit the Diocese of Madison's general fund where it will be used throughout the diocese, those setting it up may restrict the support to go toward a specific parish, Catholic school, or ministry in the diocese. The Dodgeville priest specifically wanted the St. Joseph School Endowment Fund to benefit from his annuity "because I've always been pro-school and have worked hard to make our school a vibrant place," he said.
Win-win situation
The Charitable Gift Annuity offers a 9.3 percent effective interest rate (based on one life annuity, age 75) because the payments resulting from it are partially tax-free, said Jay Conzemius, director of stewardship and development for the Diocese of Madison. "It's a way for people to include a parish, the diocese, a school, or a bishop-approved Catholic institution in their estate planning to leave a legacy to one of those organizations," he said. "The diocese benefits because we get to handle the annuity, and the school (or ministry) benefits because it is designated as the beneficiary."
"The Charitable Gift Annuity is a win-win situation for everyone involved," said Greg Keller, director of the diocesan Office of Finance. "The donor receives a set income stream for life while the gift portion of the annuity provides funding to carry on the many essential programs of the Catholic Church. As an added bonus, the donor may receive a tax deduction as well."
For more information on Charitable Gift Annuities, contact the Stewardship and Development Office at (608) 821-3046.
This ran as an article entitled: "Plan is a 'win-win situation'" in the May 9, 2002 issue of the official diocesan newspaper, The Catholic Herald. It was written by Julianne Nornberg of the Catholic Herald Staff and is reprinted here with permission.