Naming the AAHF as owner and beneficiary of a paid-up life insurance policy entitles you to a deduction equal to your cost basis in the policy, or its replacement cost ~ whichever is less. In fact, a very simple, often over-looked way to make a gift is to name the AAHF as the owner and beneficiary of a policy you no longer need. Naming the AAHF as owner and beneficiary of a policy that is not paid-up provides an income tax deduction approximately equal to the policy's cash surrender value. Continued premium payments by the donor are deductible for current income tax purposes.

Planned gifts that provide income to the donor are especially effective ~ making it possible to greatly increase return from an asset. These gifts allow you to make a contribution to the AAHF (one which the organization will receive in the future), and receive a number of current and future benefits:

• income payments for your life, and/or the life of your spouse
• income payments to other named beneficiaries
• capital gains tax reduction/bypass on sale of appreciated property
• a potential increase in income
• a current income tax deduction
• potential investment diversification
• professional management
• the probable reduction of future estate taxes and costs
• the ability to direct the purpose of your gift
• the satisfaction of supporting the AAHF during your lifetime

The gift annuity provides you with fixed annual payments for life. It is the simplest of the life income plans. The gift annuity is a binding contract between you and the AAHF. In most cases, part of each annuity payment is tax free return of principal; and part is ordinary income. If the annuity is funded with appreciated securities ~ a portion of each payment is treated as capital gains income.

The gift annuity rate is based on the age(s) of the income beneficiary(s), with older individuals receiving higher rates. A gift annuity may actually provide you with increased income, particularly if appreciated stocks or other assets such as Certificates of Deposit currently producing a low return are used to fund the agreement.

Your income tax deduction is based on the amount of your gift, the ages of the beneficiaries and the gift annuity rate. A gift annuity may be established by someone over age 50 and with a minimum of $5,000. You may establish more than one.

FYI