Give 10 Moments
Give 10 Moments are provide donors, nonprofits, and professional advisors with quarterly features about planned giving. To receive Give 10 Moments by email, join our mailing list.
Updating Your Will: Everyone’s talking about it! (February 2019)
Last month, we saw people from all corners of our region’s communities coming together to talk about – of all exciting topics – their wills!
Maybe there is something about the start of the New Year that has people ready to think about a topic that is oh-so-easy to put off, or maybe we are just lucky to live in a region where people care deeply about supporting their community.
Here’s a recap:
- On January 15, over 60 people gathered at TwispWorks in the Methow Valley to hear from Rolf Borgerson, a local attorney, about the basics of setting up a will and how to take care of important causes in the Methow Valley.
- On January 18, attorneys and Professional Advisors gathered to hear from Scott Claeys, a founding board member of the Leave 10 initiative in the Seattle area, to learn about values-based planning, a method for ensuring that their clients’ values – not just tax incentives – are reflected in their estate plans.
- On January 22, Pybus University broke its highest attendance record with almost 100 people showing up for a session about will-planning and leaving a legacy led by local attorney Colleen Frei of Jeffers, Danielson, Sonn & Aylward, and CFNCW’s Executive Director, Beth Stipe.
In each of these instances, we have been heartened by people across the region who are not only thinking of how they can best care for their families after they are gone, but also making sure that they leave something for causes they care about – their church, their favorite charities, their beloved alma mater, for example.
Our phones have been ringing here at CFNCW with calls from attorneys working with clients on charitable bequests and also from people like you, wondering how CFNCW can make their values persist beyond their lifetime.
Whatever is in the air – It’s GOOD and it’s GENEROUS.
If you’re looking for ways you can leave a legacy in your community and beyond, take a look at some of our Planned Giving resources.
If you’re looking for an attorney or financial advisor, we have a list of Professional Advisors who value community philanthropy and can help guide you in the right direction.
We are honored to be part of such a generous region and to help you give back to the place you love.
Leaving a Legacy Gift Without Updating Your Will (November 2018)
November’s “Give 10 Moment” comes to you from one of our local Financial Advisors, Ben McNair of Draggoo Financial Group. Ben presents some great strategies for leaving a legacy without the hassle of updating your will.
Looking for a method of leaving a legacy gift without spending the time and energy of updating your will or estate plan? Look no further than your qualified retirement plan (IRAs, 401(k)s, 403(b)s, etc.) or permanent life insurance policies.
These assets both allow the owner to designate a beneficiary (or multiple beneficiaries) that bypasses the probate process and takes precedent over wills or other estate planning documents, and updating a beneficiary is as easy as requesting a beneficiary change form from your financial or insurance advisor.
For many of my clients their IRA is one of their largest liquid assets. They’ve spent years contributing to them and enjoying the tax benefits they provide.
Many of my clients also find that, once they’ve reached retirement, they are not as dependent on the income the IRA can provide than they thought they would be, and simply withdraw the minimums required each year after reaching age 70 ½.
In many cases this means there will be money left over in the IRA once the owner passes away. These assets can be passed on to the next generation, but at a cost, as IRA assets are taxable to a beneficiary and may face additional estate taxes depending on the size of the owner’s overall estate.
By making a qualified charity the beneficiary of an IRA, the owner can deduct the amount from their overall estate, and the balance will pass to the charity free of taxation. This allows the IRA owner to not only make an impact on their community, but also gives them the flexibility to pass on other, more tax efficient assets to their heirs. This same strategy can also be applied to qualified and non-qualified deferred annuity contracts.
Permanent life insurance policies are another asset that can easily be updated to create a legacy gift. Life insurance is put into place as a form of protection. Policies are purchased to protect our families from a premature death where the death benefit is intended to provide income replacement and the liquidity to pay off debts.
If you have had the good fortune to live a long life and find you no longer need the insurance policies for their original intent, updating the beneficiary to your charity of choice will provide a legacy gift at your passing. Life insurance death benefits are generally paid tax-free, and this would certainly be true if a charitable organization were the beneficiary of the policy.
It is important to note that the owner of a qualified retirement plan, deferred annuity contract, or life insurance policy may name more than one beneficiary. If the owner would still like some money to be passed on to their heirs, they can name both the heirs and a charity.
While these beneficiary updates are as simple as completing a form or two, an owner should still consider any estate planning that may already be in place and ensure the changes would still coordinate with that existing planning.
Remember that your named beneficiary can be as broad or as specific as you choose. CFNCW manages hundreds of charitable funds that benefit specific nonprofits or scholarships, general “fields of interest,” and of course endowed funds that will give back forever.
A Shout Out to Nonprofits! (November 2018)
Today we want to give a quick “shout out” to our friends at the Numerica Performing Arts Center, Upper Valley MEND, and the Wenatchee River Institute for updating their planned giving material to include the Give 10 campaign! Check out samples of their work:
|NUMERICA PERFORMING ARTS CENTER|
|UPPER VALLEY MEND|
|WENATCHEE RIVER INSTITUTE|
Including information about Give 10 in your materials will help your donors understand how their legacy fits into a larger effort to take care of this region for the generations to come.
It also gives them peace of mind, knowing that they can choose to have their legacy gift managed by an organization whose primary mission is the stewardship of charitable assets.
Please lean on our expertise and resources as you engage your donors in these important conversations. Click here for a Planned Giving Toolkit.
CRUTs: A Practical Path to a Lasting Legacy (October 2018)
Today we’d like to introduce you to the Charitable Remainder Unitrust, also known as the CRUT. CRUTs can be a donor’s best friend, providing them an income stream for life and allowing them to establish a legacy once they pass.
Consider this story from local attorney, Russ Speidel:
In 1995, an investment advisor called me for help. He had an elderly retiree-client, a single man who owned about $1 million of appreciated Alcoa stock. The advisor was looking for a way to sell the stock, to avoid paying capital gains tax, AND increase his client’s monthly income. This was a tall order, but when I inquired and learned that the retiree might have a charitable intent, there was an easy solution: form a Charitable Remainder Unitrust with the Community Foundation. It worked marvelously. The retiree transferred his Alcoa stock to the Community Foundation, which could sell it tax free. Then, during the remainder of the retiree’s lifetime, the CRUT paid to the retiree all of its net income, a sum much greater than the Alcoa dividends. The retiree, Roy Hill, established a lasting legacy through a Scholarship Fund and a Designated Fund. To this day, those funds support students and provide income to his favorite charity every year. In the 20 years since he passed in 1998, approximately $1.1 million has been awarded in grants and scholarships and the funds have grown in value with a balance today of over $1.4 million – allowing his legacy to continue on, forever.
By establishing a CRUT, Mr. Hill secured a larger income for himself during the remainder of his life, and he left an astonishing gift to the community by creating the Roy W. Hill Music Scholarship and a designated fund to benefit the symphony.
CRUTs work particularly well when people have an appreciated asset and want to avoid capital gains tax. People who own rental properties – and are tired of being landlords – can gift their rental properties to CFNCW to establish a CRUT. Often the interest income from the CRUT provides as much if not more income than they would have received from tenants, without all the hassle of maintaining the property.
CRUTs provide tax advantages and provide a charitable deduction for the donor. And the best part: They will have established a charitable legacy in the process.
Working with Professional Advisors to Achieve your Charitable Goals (July 2018)
North Central Washington is full of well-trained Professional Advisors who can help you realize your charitable goals and make tax-smart financial decisions. We are fortunate at the Community Foundation of NCW to work with many of these advisors who see the value that charitable giving provides their clients as well as the community.
When is it time to see a Professional Advisor?
- If you are thinking about creating or updating your will
- If you are interested in the tax-benefits of charitable giving
- If you are planning retirement and want to learn more about creating income streams through a charitable trust
To help you find a professional advisor, we have created a list on our website which includes attorneys, accountants and financial planners.
We talked to some of the different types of professionals on our list about the services they offer and why charitable giving is an important part of their conversations with clients. Here’s what they have to say:
Attorney: Christina Davitt, Ogden Murphy Wallace
“My role as an attorney is to help people reach their life goals through their estate planning by providing for their family, friends and community. To paraphrase, we eat fruit from trees we did not plant. When you include a charitable gift in your estate plan, no matter how large or how small, you are not only leaving a legacy, but also setting an example for others to follow.”
Visit your attorney if you need to write or update your will, consider creating a trust, or find out how to create income streams during life while also leaving a legacy.
Accountant: Jeff Neher, Cordell, Neher & Co.
“The desire to leave a lasting legacy is a deeply personal issue, which is so much more than just deciding to leave money to an organization or individual. Supporting our favorite charitable organizations and causes well past our lifetimes through the Foundation could be one way to create this legacy. Using a CPA and financial advisor who cares about doing and getting it right, improves the success of your wishes and goals. Leaving a legacy is about transferring your values and beliefs to generations to come.”
Visit your accountant to explore ways to meet your charitable goals while also making tax-smart decisions.
Financial Planner: Chris Avey, Financial Alternatives
“I’ve been doing this for 20 years and worked with multiple Community Foundations. Community Foundation of North Central Washington has been wonderful to work with. I’ve had some clients I wanted to sit down with and discuss their giving goals with an idea in mind. Each time, we’ve been able to improve the client’s situation through a new idea and they’ve felt wonderful about the gift they’ve given each time and it has been a fantastic experience for all involved.”
Visit your Financial Planner to figure out how best to achieve your giving goals within your overall financial picture.
Remember, choosing a Professional Advisor is an important decision. Take time to find the right fit and make sure to do your research and ask the right questions. Some resources to help you with this decision are found below.