An annuity is ordinarily several different investment that you just just acquire to acquire a lump sum then get principal and interest payments greater than a time frame. States have extended been in charge of regulating the insurance coverage coverage and annuity industries.
Annuities are particularly associated with charities for the purpose that charities invest substantial donations that they get in annuities, or they may perhaps possibly get donations inside the sort of an annuity (which include things like a grant that may be paid out as time passes). In some situations charities even sell gift annuities, that happen to be contractual arrangements amongst donors and charities specifically exactly where the charity tends to produce fixed periodic payments to one particular distinct or two guys and girls (annuitants) in exchange for income or assets transferred for the charity.
The National Association of Insurance coverage coverage Commissioners has drafted two model acts to help states regulate the so-called “planned giving” sector (planned giving is ordinarily a approach of creating a charitable contribution specifically exactly where some or all gift components are only distributed, or have their ownership lastly resolved, just just after some occasion has passed).
The initial model act on this subject is unquestionably the Charitable Gift Annuities Model Act, which capabilities a sizable level of desires for charities that use annuities as a tool for funding their operations. (For added information and facts and details about charitable gift annuities, see the sidebar “Having your cake and consuming it also: Charitable gift annuities.” This act calls for charities that present gift annuities to notify state officials that they do so. The model act also calls for that the charities have at least $300,000 in out there assets. You could view a copy of your act at www.pgresources.com/draft2.html.
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