Pooled Income Fund
A fund contributed to by any number of donors with the understanding that each donor will receive income from the Fund during the rest of their lives (or for the lives of the persons they designate to receive the income). When each donor (or their designee) dies, the value of those shares becomes the property of The AEA Funds for its charitable purposes.
1. Are there minimum or maximum amounts which I can contribute under your life income arrangements?
The minimum initial contribution is $5,000, with no more than two beneficial life estates involved. There is no minimum for additional contributions, and there is no maximum for initial or additional contributions. To contribute please contact firstname.lastname@example.org
2. Can I become a participant in the Pooled Income Fund at any time during the year?
Yes, there are no restrictions on when you can come into the Pooled Income Fund.
3. How would my life income interest be determined and how frequently would this income be paid to me?
A donor's life income gift is represented by participating units in the Fund, similar to a mutual fund arrangement. The amount of income is determined by the rate of return earned by the entire Fund for that year. Payment of income will be made to you quarterly.
4. Are there any associated fees for participating in the funds?
There will be no annual fee taken by The AEA Funds while acting as trustee of the Fund. The AEA Funds also pays all custodial and investment fees charged by the Fund's custodian and investment advisors.
5. Is it possible for the Life income Agreement to provide income for both myself and another, for as long as we live?
Yes. This is called a Two-Life Income Agreement.
6. Are there income tax advantages to me if I invest in a Life Income Agreement with you?
Yes. You will be entitled to an immediate charitable contribution deduction in the year of your gift on your personal tax return. The amount of your charitable deduction is determined by federal government tables. Your charitable gift would be reduced by the present value of your life income interest. The actual deduction will be dependent on the age of the designated beneficiaries and the size of your contribution. The charitable deduction will be smaller in the event you desire a Two-Life Income Agreement, since it then would be dependent on the age of both beneficiaries.
7. How much am I allowed as a present income tax charitable deduction on a contribution, and can I carry over any excess contribution on subsequent income tax returns?
Generally if your gift to our Fund is in money, you would be allowed to take a charitable deduction of up to 50 percent of your adjusted gross income. If your charitable gift is over the permissible annual contribution deduction, you are allowed to carry the excess over into the next five (5) succeeding tax years — thus, six years in all. If your gift, on the other hand, is of long-term appreciated securities, you are entitled to a 30 percent deduction on your adjusted gross income, again with a five-year carryover of any excess charitable contribution.
8. How can I compute what my specific deduction will be?
If you will furnish us with your date of birth, or, if there are to be two income beneficiaries, both dates of birth, and the approximate amount of your anticipated contribution, we shall be happy to furnish you and your advisors with the amount of the charitable deduction based on the information supplied.
9. What is my situation as to federal estate taxes should I become a participant in your Life Income Agreement?
Should the Life Income Agreement be based on your life income alone, the total value of your interest in our Pooled Income Fund would effectively be removed from your taxable estate. However, if your Life Income Agreement involves your life and that of a non-spouse survivor's life interest would be subject to federal estate tax based on the survivor's age at your death. Should the other beneficiary be your spouse or not survive you, no part of your interest in our Pooled Income Fund would be subject to tax in your estate under present law.
10. Besides favorable tax benefits to me, what are some of the other advantages of a Pooled Income Fund gift?
The personal satisfaction of making a substantial contribution to your favorite philanthropy during your lifetime. The securities are lodged for safekeeping with a large financial institution. No obligation to pay an annual fee as long as The AEA Funds acts as trustee in holding the Fund assets. Greater diversification of assets than if you yourself established a separate charitable remainder annuity trust or unitrust. The opportunity to convert low-yield securities to a higher-yield common diversified fund at low or possibly no tax cost. Permitting the direct distribution of Fund property at death, thus reducing probate expenses and delays.
11. Will I receive a written statement notifying me of the amount of income that I should report on my federal income tax return?
Yes, a statement will be furnished to you shortly after the end of each calendar year.