Charitable gift annuities can be useful tools for clients looking both to transfer assets and to derive an income stream. But planners caution that despite the advantages of CGAs, they also come with several caveats that clients don’t always fully understand.
A CGA allows an individual to transfer assets to a charity in exchange for a tax benefit and a lifetime annuity. The annuity payments generally stop when the person dies, and the charity keeps the remaining funds.
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