Planned Giving Glossary

Annuitant The individual who receives lifetime payments from a gift annuity.

Annuity/Gift Annuity An irrevocable gift which pays income for life to one or two recipients (annuitants); the rate of return is based on the age(s) of the annuitant(s) at the time the gift is funded.

Appreciated Property Property, such as real estate or securities, that has a value greater than its cost basis.

Capital Gains, Realized Capital Gains The excess of money received from the sale of property over the original amount paid for the property (cost basis).

Charitable Income Tax Deduction The amount a donor can deduct on a federal income tax return (if the donor itemizes) for a charitable gift.

Charitable Lead Trust A gift which provides fixed or variable current income for church or charity for the life of the donor or for a term of years, after which the remaining principal reverts to the donor or donor’s heirs.

Charitable Remainder Annuity Trust An irrevocable gift which pays a fixed dollar amount annually to one or more income beneficiaries for life or for a term of years, after which the principal becomes a gift to the church or charity designated by the donor.

Charitable Remainder Unitrust An irrevocable gift which pays a fixed percentage of the Trust’s value, as revalued annually, to one or more income beneficiaries for life or for a term of years, after which the principal becomes a gift to the church or charity designated by the donor.

Charitable Remainder Beneficiary, Charitable Beneficiary The charity identified by the donor in a gift contract to receive the remaining principal after the life income beneficiaries’ death or termination of contract.

Codicil An addition or amendment to a will.

Cost Basis The original cost of property plus improvements and other expenses paid by the owner during the period of ownership.

Deferred Gifts Another term for planned gift, i.e. a carefully considered way of giving out of one’s accumulated assets that is prearranged through a will, a trust, or other life income agreement that may provide lifetime income for one or more individuals, where upon their deaths the remaining principal will go to the named charitable beneficiary.

Deferred Payment Gift Annuity Identical to a Gift Annuity except that instead of income payments beginning immediately, they begin at a future date specified by the donor. This usually has the effect of increasing the rate of return.

Endowment A fund whose principal is held in perpetuity, and income only is distributed.

Executor/Executrix The individual named in a will to settle the testator’s estate.

Federal Estate Tax The tax imposed on the transfer of property upon death.

Federal Gift Tax The tax imposed on the transfer of property during the lifetime of the donor. This tax is paid by the donor.

Intestate Dying without a will.

Life Expectancy An estimated calculation of the number of years a person will live from any particular age.

Memorial Gift A gift in memory of a deceased individual.

Pooled Income Fund A life-income gift which functions like a mutual fund, in that each income recipient receives lifetime quarterly payments based on her/his proportion of the Fund. Gifts are irrevocable, may name one or two persons as income recipients, and pay the remaining principal to the church or charity designated by the donor.

Prospect An individual identified as being a potential donor.

Residuary Clause A clause in a will that bequeaths or devises property not already disposed of earlier in the will.

Revocable Trust A life-income gift which pays a fixed percentage of the trust’s value, as revalued annually, to one or more income beneficiaries for life; however, the donor may make withdrawals from principal or revoke the trust entirely. No tax deduction is available to the donor at the time the trust is established.

Secondary Beneficiary The person named in a gift agreement to receive the life income payments should the primary beneficiary predecease him or her.

Testamentary Trust A trust created by a provision in a person’s will.

Testator The individual making a will.

Trustee The individual or institution that is responsible for administering a trust.

Trust Principal The assets of a trust.