Life income plans allow you to make a gift to the Museum and at the same time retain a benefit from the assets you give. When you establish a life income plan, you make an irrevocable gift of assets and in return receive an income stream for life or for a term of years. When the life income plan terminates, the assets remaining pass to MoMA. Life income plans offer a number of important potential benefits: an income-tax charitable deduction for the value of MoMA’s remainder interest; increased spendable income in many cases; elimination of, or reduction in, capital gains tax liability if appreciated property is donated; and a diminution in the size of your taxable estate. Most importantly, the financial benefits derived from these arrangements allow you to make a significant contribution to the Museum, often larger than would otherwise be possible. You should consult with your financial, tax, and legal advisors for more information on life income plans as they pertain to your particular situation and needs.

There are two types of life income plans that can be used to benefit MoMA:

Charitable Gift Annuities

Partly gifts and partly annuities, these are the oldest and most popular vehicles for making a gift and receiving a generous income stream. They provide an annual sum for life for you and/or another person in return for a gift to MoMA of at least $10,000 in cash or marketable securities. The payout rate depends on the number of annuitants and their ages. (MoMA follows the rates recommended by the American Council on Gift Annuities up to a maximum of 9%.) Creating a charitable gift annuity generally allows you to claim an immediate income-tax charitable deduction. During the actuarial life expectancy of the annuitant(s), a portion of each annuity payment is treated as a tax-free return of principal.

It is possible to defer annuity payments until a future date of your choosing, an attractive feature for younger donors. By postponing annuity payments until retirement, for example, you can increase the annuity payout and the income-tax charitable deduction. The charitable deduction is claimed in the year the gift is made.

Charitable Remainder Trusts

These separately managed trusts can be tailored to meet your financial goals with respect to the payout rate, type of income stream (variable or fixed), and payment schedule. To establish a remainder trust, you make an irrevocable contribution of cash, securities, or other property, which is placed in trust. The trust pays an income stream to one or more named beneficiaries (which can include you) for life and/or for a set term of years (not to exceed 20), and the Museum receives the right to principal as a remainder interest. The two most common types of charitable remainder trust are: (1) the annuity trust, which pays a fixed dollar amount each year based on a percentage (at least 5%) of the initial fair market value of the trust assets; and (2) the unitrust, which pays a variable income stream based on a percentage (again, at least 5%) of the fair market value of trust assets as revalued each year. A deferral feature is available for charitable remainder unitrusts. Because charitable remainder trusts (like an IRA or 401(k)) are tax-exempt, this deferral feature can make them a useful retirement planning tool if you are in a position to defer your receipt of an income stream. Charitable remainder trusts are typically funded with assets worth $100,000 or more. Establishing such a trust generally entitles you to claim an immediate income-tax charitable deduction.

Contact the Office of Planned Giving at planned_giving@moma.org or (212) 333-6527 for further information.

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