AFFIRM Annuity Organization Types

Overview

Listed below are the AFFIRM annuity organization types.

Annuity Organization Types

Charitable Organization: Designates a Participant organization entity of a tax-exempt organization recognized by the IRS as a charity. Listed below are two types of charitable trusts where this Participant organization may be selected:

• The charitable lead trust is where a grantor may stipulate a charitable organization receive tax deductible income for a specified amount and/or duration of time. When the specified time elapses, the principle of the annuity is transferred to the donor’s beneficiaries.
• The charitable remainder trust is where the income from the annuity is paid to one or more individuals until the owner’s death, at which time the balance passes tax-free to a designated charity.

Corporation (general): Designates a Participant organization entity of Corporation as the owner or beneficiary of an annuity contract. The contract is usually paid for by the corporation and is listed as the beneficiary.

Estate: Designates a Participant organization entity of Estate to designate the annuity distribution to heirs according to the dictates of the person’s will or, if there is no will, a court ruling.

Government Agency: Designates a Participant organization entity of an administrative unit of government. Examples include “the Central Intelligence Agency”; “the Census Bureau”; “Office of Management and Budget”; “Tennessee Valley Authority”.

Limited Liability: Designates a Participant organization entity of LLC (Limited Liability Company). An LLC is a type of company whose owners and managers receive the limited liability and (usually) tax benefits of an S Corporation without having to conform to the S corporation restrictions.

Nonprofit Organization: Designates a Participant organization entity as an incorporated nonprofit organization which exists for educational or charitable reasons, and from which its shareholders or trustees do not benefit financially. Also called a not-for-profit organization.

Partnership: Designates a Participant organization entity as a partnership defined as a relationship existing between two or more persons who join to conduct a trade or business. Each person contributes money, property, labor, or skill, and expects to share equally in the profits and losses or liabilities of the business. The partnership itself does not pay income taxes, but each partner has to report their share of business profits or losses on their individual tax return.

Plan: Designates a Participant organization entity as a Plan defined as a unique type of legal organization which is similar to (but *is not* the same as) a Trust. Plans have specific requirements with regard to the charter and provisions, based on the reason for incorporation (the type of pension plan for which the Plan entity is being established).

Notes: 401(k) plans and other similar qualified funding vehicles are owned by organizations qualified as Plans.

Private Corporation: Designates a Participant organization entity as a private corporation, which is organized for engaging in a learned profession such as architecture, law, or medicine. Professional Corporations are required to file articles of incorporation that meet the participating state’s requirements for professional corporations.

Sole Proprietorship: Designates a Participant organization entity as a sole proprietorship, defined as an unincorporated business, owned by one individual. Sole proprietorship is the simplest form of a business organization to start and maintain. The business itself has no existence apart from the owner. The owner undertakes the risks of the business for all assets owned, whether used in the business or personally owned, and includes the income and expenses of the business on his tax return. Its liabilities are the owner’s personal liabilities.

Trust: Designates a Participant organization entity, which acts as a fiduciary trustee or agent for individuals and businesses throughout the administration of trust funds, states and custodial arrangements.