The initial income tax deduction for the charitable remainder value is based on the number of years the trust is to run, rather than the number and ages of named successor recipients. In another situation, a single donor could wish to provide future financial support for several brothers, sisters or friends who might survive him or her without, however, making outright bequests that would later pass to heirs of the beneficiaries. Such an individual can establish a series of two life annuity trusts, making that person the first income recipient under each trust. At the second death, one or another charity would be the remainderman. Comparison with Gift Annuities.
Many donors are familiar with charitable gift annuities.
These gifts are not in trust form, but are a simple contract between the donor and a charity. As with the annuity trust, the dollar payments to named recipients are a fixed sum. In other respects the two giving methods differ. Uniform annuity rates have been suggested for charitable Gift Annuities to increase with age of the annuitants, while the payout rate for an annuity trust typically is tied to current long-term interest rates. Older donors interested in a charity for whose benefit either method can be used may do better with a gift annuity, while donors about 70 or younger currently can realize more income from an annuity trust.