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The charitable gift annuity (CGA) has become an increasingly popular method for making current charitable contributions while at the same time assuring lifetime income. Also, by removing assets from your taxable estate, you save on estate tax. Under this arrangement, you can transfer cash or other property (e.g., appreciated stock) to a charitable institution in exchange for its promise to pay you and possibly one other beneficiary (usually your spouse), a lifetime annuity.

As an added bonus, most CGAs produce charitable deductions between 40 and 60 percent of the value of the asset transferred at the time the property is transferred to the charity.

The annuity can begin immediately or be deferred until a later date.

Although the terms and rates used by most charities are generally based on rates suggested by the Committee on Gift Annuities, be sure to select a charity that is unlikely to experience financial difficulties that might result in a reduction or interruption of your annuity payments. Your annuity payments are secured only by the full faith and credit of the charitable institution.