Funding a life income gift that names someone else as a beneficiary is an incredible act of generosity. Some have a parent or older relative whose fixed income is increasingly pinched by inflation, or a sibling who wasn’t able to save enough for retirement. Others want to provide retirement income for someone, like a caretaker or housekeeper, who has devoted years to supporting their family.  

Lifetime Income For Them

The Pomona Plan offers two primary vehicles for establishing a life income gift that names someone else as a beneficiary. Both can be designed so that your beneficiary receives annual income for the rest of their life: 

• A charitable gift annuity (CGA) offers your beneficiary fixed payments for life, backed by the full financial resources of Pomona College. The older your beneficiary is at the time payments begin, the higher their rate will be. The minimum age when the beneficiary can start receiving payments is 60. 
• A charitable remainder trust (CRT) pays your beneficiary either a fixed percentage of the trust’s value or a fixed dollar amount, depending on which type of trust you fund. A CRT allows you to name multiple beneficiaries, and the minimum age when the beneficiary can start receiving payments is 50.

Those who fund a life income gift for another person can rest assured that their loved one will receive regular payments, no matter what. Many participants also report another benefit of having Pomona College as a financial intermediary and charitable beneficiary: it alleviates the discomfort that can occur when, for example, one sibling feels reliant on another or a parent is embarrassed to accept their child’s help.

Substantial Tax Advantages For You

In addition to providing financial stability for a person you care about, a life income gift for a friend, relative or valued employee offers major tax benefits. Both a CGA and a CRT offer an immediate charitable income tax deduction in the year of your gift and a possible reduction of your taxable estate. A CRT also allows for potential capital gains tax savings when you fund with appreciated stock.

The Pomona Plan Difference

Take Monica, age 72, who has built a successful career as an attorney and has planned for a comfortable retirement. Due to a long-term disability, her older brother James, 76, hasn’t been able to do the same. When Monica funds a $200,000 charitable gift annuity with cash and names James as the beneficiary: 

• James receives $14,600 annually for the rest of his life, without depending on Monica to write a check, 
• Monica takes an immediate tax deduction of $82,220 in the year of her gift and
• Future Pomona students gain access to scholarships, hands-on learning experiences and transformative educational opportunties

To find out more about funding a CGA or a CRT that names another person as a beneficiary, contact the Pomona Plan team at (800) 761-9899 or pomonaplan@pomona.edu.