A variable annuity is a tax-deferred investment structure sold by insurance companies to consumers looking for long-term growth to later supplement retirement income. You can donate your variable annuity to a charity to reduce the size of your taxable estate or reduce assets for federal assistance programs such as Medicaid. Through the donation, you can still maintain an income source, while getting a large tax deduction for the value of the donation. Upon your death, the charity receives the cash value of the annuity.
Read the annuity contract to see if you are allowed to donate the annuity. Most annuity companies allow the owner to gift or donate the annuity by changing the owner.
Request an "Ownership Change Form" if you are allowed to donate the annuity directly. If you are not allowed to donate it directly, request a "Distribution Form."
Complete the Ownership Change Form or Distribution Form as required for your particular annuity. With the Owner Change Form, fill in the new owner information with the charity's name, address and tax identification number. If you are required to distribute the annuity, complete the Distribution Form for a 100 percent distribution.
Submit the signed forms to the annuity company. The charity will receive a new annuity contract if you changed the owner. A check is sent if you completed distribution.
Take the check to the charity. Request an application for a charitable gift annuity and fill it out for the value of the check received from your annuity. The charity will buy an annuity that pays you a monthly, quarterly or annual income for the rest of your life and use the rest of the funds for its charitable causes.