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Stewardship Kaleidoscope Successful Wills and Bequests Programs for Congregations Presented by Marc Carmichael R&R Newkirk Company Why Launch a Wills Program? Majority of planned gifts come from wills Simple gifts to understand and promote Any church can do it
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Stewardship Kaleidoscope Successful Wills and Bequests Programs for Congregations Presented by Marc Carmichael R&R Newkirk Company
Why Launch a Wills Program? • Majority of planned gifts come from wills • Simple gifts to understand and promote • Any church can do it • Donors more likely to consider major gifts through their estate plans than during life • Starting point for a planned giving program • In the immortal words of Willie Sutton: That’s where the money is!
The Bequest Prospect • Is generally a member or past member of the congregation • Has sufficient wealth to make a bequest • Is retired or nearing retirement age – but younger donors should be encouraged
Four Ages of Estate Planning? • 30s-40s are making their first wills • 50s-60s changing family situations • 65-75 age group seek income security, money management • 75+ reviewing plans for final dispositions
It’s a Matter of ASKING… “Will you include our Church in your will?”
NCPG Survey of Donors 2000 Where did donors first get the idea to make charitable gifts by will or trust? No. 1 answer: Publications received from the organization.
Message to Members • You need a will • Here’s how to get a will • Review your will regularly • Here’s how to name our church in your will (include your correct legal name and sample bequest language) • Please tell us about your bequest
Your Bequest Can Perpetuate Your Annual Contributions If Your $ 500 You Can $ 12,500 Annual $1,000 Perpetuate $ 25,000 Gifts $1,500 Them with a $ 37,500 Total: $2,000 Bequest of $ 50,000 $5,000 at Least: $125,000
Websites • Planned giving web page should tell the world you are glad to receive bequests • Provide your church’s correct legal name
Estate Planning Seminars • 75% estate planning, 25% gift planning • Lots of breaks • Rotating roundtable discussions • Individual Counseling • Famous estates
Bequest Administration • List matured bequests in a Wills Journal • Request copy of decedent’s will • Establish procedures for tracking status of probate proceedings and anticipated distribution of funds • Consider bequest tracking software
Registry of Bequest Expectancies • Name of donor • Address of donor • Size of bequest (or estimate) • Source of information about bequest
The “Iceberg Effect” in Wills and Bequests Programs Many planned giving officers say only 25% of donors disclose bequest expectancies in advance. Anticipate that 75% of matured bequests will arrive unannounced.
Goals for Your Program • Value of gifts or expectancies • Number of gifts or expectancies • Cash flow average • Visits to prospects/ seminars/other marketing/cultivation
Tips from Kim Warner • Wills poster • Simple brochure • Publicize planned gifts • Include reports on endowment in mailings • Minute for mission • One or two seminars a year • Bulletin inserts on wills and bequests • Mailing reporting on results of planned gifts and their impact Presbyterian Endowment Education and Resource Network: www.peernetwork.org
Planning Estate Gifts • Outright bequests • Bequests reserving life income to family member (trust, gift annuity, pooled fund) • Contingent bequests/disclaimers • Will “substitutes” – life insurance, living trusts, IRAs, beneficiary designations on financial and brokerage accounts • All are deductible for estate tax purposes
Leave Church “Tax-Burdened Assets” • U.S. Savings Bonds • IRAs and deferred compensation • Accounts receivable • Installment payments on land sale contracts • Unpaid commissions I.R.D.
Taxes on Retirement Accounts • Federal Estate Tax and State Death Taxes (some states) • Federal Income Tax (IRD) • State Income Tax
Bequests Beat Bonfires Bequeath ordinary income and tangible personal property to church Ted DeGrazia, artist
Outright Bequest Options • Specific $$ amount • Specific assets • Type of asset • Percentage of net value of estate • Residue of estate • Percentage of residue
Who Was John Beresford Tipton? Residuary bequests can be uncertain
Disclaimers Provide Flexibility • Heirs can have right to “disclaim” (turn down) all or part of a bequest and gift will pass to named charity • Possible income tax and “death tax” savings
Contingent Charitable Bequests • Church benefits if original named beneficiary has already died • Possible tax savings to donor’s estate
“Ultimate Contingent Beneficiary” “I outlived three husbands and everybody else in my family”
Gifts through Will/Estate Plan • Outright bequests • Contingent bequests/disclaimers • Bequests reserving life income to family member (trust, gift annuity, pooled fund) • Will “substitutes” – life insurance, living trusts, IRAs, beneficiary designations on financial and brokerage accounts (POD and TOD accounts)
“Deferred Bequests” Are Shared Between Charity and Family • Charitable gift annuity • Charitable remainder annuity trust • Charitable remainder unitrust • Charitable lead trust • Pooled income fund • Gift of home/farm with lifetime use retained
Charitable Remainder Trusts Charities Donor, others
Gifts through Will/Estate Plan • Outright bequests • Bequests reserving life income to family member (trust, gift annuity, pooled fund) • Contingent bequests/disclaimers • Will “substitutes” – life insurance, living trusts, IRAs, beneficiary designations on financial and brokerage accounts (POD and TOD accounts)
Life Insurance in Gift Planning • Valuable asset for giving • No need to make or change a will • Church can receive just a portion of policy
For Copies of Slides, E-Mail: Marc@rrnewkirk.com