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Legacy Giving in the Local Church United Methodist Legacy Partners of the North Carolina Conference. CONTENTS. Background & Introduction Planned Gift Overview The Local Church Process Workshop and Discussion How to Get Help. Background & Introduction .

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slide1

Legacy Giving

in the

Local Church

United Methodist Legacy Partners

of the

North Carolina Conference

UM Legacy Partners of The North Carolina Conference

slide2

CONTENTS

  • Background & Introduction
  • Planned Gift Overview
  • The Local Church Process
  • Workshop and Discussion
  • How to Get Help

UM Legacy Partners of The North Carolina Conference

slide3

Background & Introduction

UM Legacy Partners of The North Carolina Conference

slide4

“If those who ‘gain all theycan’ and ‘save all they can,’ will likewise ‘give all they can,’ the more they gain, the more they will grow in grace, and the more treasure they will lay up in heaven.”

— John Wesley

UM Legacy Partners of The North Carolina Conference

slide5

UM Legacy Partners Courtesy Motion

Approved Unanimously

at Annual Conference

June 2006

UM Legacy Partners of The North Carolina Conference

slide6

Legacy Partners

Nurture the Christian concept of stewardship of all the gifts God has given us—time, talents, and resources, including accumulated, inherited, and appreciated financial assets.

UM Legacy Partners of The North Carolina Conference

slide7

Legacy Partners

Support the future mission and work of our local churches and the wider work and service of the United Methodist Church through planned giving, including wills, bequests, and trusts.

UM Legacy Partners of The North Carolina Conference

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Legacy Partners

Inform, encourage, and assist the local church in effective use of planned giving.

UM Legacy Partners of The North Carolina Conference

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Legacy Partners

Utilize the planned giving expertise of the agencies and institutions of our Annual Conference.

UM Legacy Partners of The North Carolina Conference

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Legacy Partners

Asbury HomesCamp and Retreat MinistriesDuke Divinity SchoolLouisburg CollegeMERCI

Methodist University

Methodist Home for ChildrenNC Conference of the UMCNC Wesleyan CollegeUM Foundation, Inc.UM Retirement Homes

UM Legacy Partners of The North Carolina Conference

slide11

Legacy Partners

  • Office of the Bishop
  • Conference Commission on Stewardship
  • Conference Office of Congregational Development
  • Conference Director of Communications
  • Conference Connectional Ministries

UM Legacy Partners of The North Carolina Conference

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Legacy Partners

  • Provide planned giving information, training, and inspiration to congregations:
  • Encourage and support special ministries and enlarged outreach services
  • Include the mission and ministries of the United Methodist Church and its agencies and institutions.

UM Legacy Partners of The North Carolina Conference

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Legacy Partners

  • Encourage each congregation to have a Legacy Leader:
  • Learn about planned giving options
  • Develop an ongoing endowment & planned giving initiative within the congregation.

UM Legacy Partners of The North Carolina Conference

slide14

Legacy Partners

  • Congregations that already have an active endowment & planned giving program:
  • Name a Legacy Leader for ongoing local leadership
  • Share experiences and best practices with other congregations

UM Legacy Partners of The North Carolina Conference

slide15

Legacy Partners

  • UM Legacy Partners:
  • Conduct special training and information sessions through District workshops and other special regional gatherings
  • Distribute supportive materials, videos, and online information.

UM Legacy Partners of The North Carolina Conference

slide16

Legacy Partners

  • Encourage congregations to elect a Legacy Leader as soon as possible.

UM Legacy Partners of The North Carolina Conference

slide17

Legacy Partners

  • Utilize the second Sunday in September
  • as an annual Legacy Building Sunday:
  • Inspire and educate congregation members to make use of wills, bequests, life insurance and other planned gifts
  • Expand the mission and ministries of our church - locally, in our Conference, and worldwide.

UM Legacy Partners of The North Carolina Conference

slide18

Planned Gift Examples

UM Legacy Partners of The North Carolina Conference

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Example 1: One of your church members approaches your pastor and wants to include your church in his or her will. The gift will be a parcel of land currently worth $250,000.

Question: What should the pastor do?

UM Legacy Partners of The North Carolina Conference

slide20

Example 2: One of your members approaches your pastor and wants to make an income-producing gift of an appreciated asset to the church. The $100,000 asset currently produces very little income. How can the donor receive additional income and make a gift?

Question: What should the pastor do?

UM Legacy Partners of The North Carolina Conference

slide21

Consideration: Does the church have the structure in place that allows the pastor to address these prospective donor questions?

  • If so, how can leaders help to ensure that the proposed Legacy gift fulfills both the requirements of the donor and of the church?

UM Legacy Partners of The North Carolina Conference

slide22

If not, where can the pastor and church leaders get help?

  • What can the pastor and church leaders do to be prepared for inquiries from prospective Legacy donors?

UM Legacy Partners of The North Carolina Conference

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Planned Gift Overview

UM Legacy Partners of The North Carolina Conference

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For Planned (Deferred) Gifts, Donors Receive:

  • Satisfaction From Supporting a Favorite Church or Charity
  • Tax Advantages
  • Life Income
  • Income for Others

UM Legacy Partners of The North Carolina Conference

slide25

Some Assets to Use for Gifts

  • Cash
  • Securities
  • Real Property
  • Personal Property
  • IRA’s and Retirement Plans
  • Life Insurance
  • Savings Bonds
  • Business Assets

UM Legacy Partners of The North Carolina Conference

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Some Types of Planned Gift

  • Life Income Plans
  • Bequests
  • Life Insurance
  • Retirement Plans
  • Life-estate Agreements
  • Revocable Living Reserved

UM Legacy Partners of The North Carolina Conference

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Some Life Income Plans

  • Charitable Gift Annuity
  • Charitable Remainder Unitrust

UM Legacy Partners of The North Carolina Conference

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Give Through a Charitable Gift Annuity

  • A Gift Annuity is a simple combination of two concepts:
  • A Charitable Gift,and
  • A guaranteed income for life - called anAnnuity

UM Legacy Partners of The North Carolina Conference

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Charitable Gift Annuity

  • Give an asset and receive income for the rest of your life
  • Receive current income tax deduction
  • Receive part of each payment tax free
  • Avoid some capital gains if funded using an appreciated asset
  • Avoid Probate Costs and Estate Taxes

UM Legacy Partners of The North Carolina Conference

slide30

Current Gift Annuity Rates

Source: American Council on Gift Annuities

Age Number of Lives

One Two

65 6.0% 5.6%

70 6.5 5.9

75 7.1 6.3

80 8.0 6.9

85 9.5 7.9

90 11.3 9.3

UM Legacy Partners of The North Carolina Conference

slide31

Gift Annuity Example

Property

$50,000 Cash

Property

$50,000

Remainder to

Charity

Income tax deduction of $20,465 may save $5,116.

One Life

Annuity of $3,600 for life. Tax-free amount $2,502. Estimated one life payout of $45,720. Effective rate 9.9%.

After one life,

property to charity.

John Jones 76 (25% Tax Bracket)

7.2% Annuity

UM Legacy Partners of The North Carolina Conference

slide32

Living Unitrust Life Income

6% Unitrust

Trust Principal

$200,000

Charity

$321,687

Two Lives

Increased income from

trust $12,000. Effective

rate 6.52%.

Remainder to

Charity.

John Jones 65 Mary Jones 60

Property

$200,000

Bypass of gain saves $32,000. Deduct $51,470.

UM Legacy Partners of The North Carolina Conference

slide33

Give Through Your Will

  • A fixed amount
  • Designated property
  • A percentage of your estate
  • A residual bequest
  • A testamentary trust

Each State has specific guidelines.

UM Legacy Partners of The North Carolina Conference

slide34

Give Through Life Insurance

  • A paid-up policy
  • A policy on which you are still paying premiums
  • A new policy to benefit the charity
  • An existing policy naming the charity as a beneficiary

UM Legacy Partners of The North Carolina Conference

slide35

Give Through Retirement Plans

  • IRA
  • 401 (K), 403 (B)…
  • Profit Sharing Plan
  • Tax Sheltered Annuity
  • Other

UM Legacy Partners of The North Carolina Conference

slide36

Give Through Life Estate Reserved

  • Deed home, vacation home, or farm to charity
  • Take income tax deduction
  • Use property for remainder of donor’s life
  • Property passes to charity – no probate cost

UM Legacy Partners of The North Carolina Conference

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Home or Farm

$200,000

Deed to Charity

Trust Principal

$200,000

Charity

$200,000

Deed to charity. Retain right to use property.

Two Lives

Income tax ded.

of $56,000.

After two lives,

property to charity.

Life Estate Reserved

John Jones 75 Mary Jones 70

UM Legacy Partners of The North Carolina Conference

slide38

Give Through a Revocable Living Trust

  • Allows one to change mind, to revoke a trust agreement
  • Can provide life income and serve gift intentions while in force
  • Provides flexibility with individuals and institutions during life
  • Takes precedence over will

UM Legacy Partners of The North Carolina Conference

slide39

The Local Church Process

UM Legacy Partners of The North Carolina Conference

slide40

What Does The Discipline Say?

¶ 2532.5:

1. Board of Trustees receives and administers all bequests and trusts, and invests all trust funds

2. Charge Conference can give notice to Board of Trustees that it is delegating responsibilities in 1. to the permanent endowment committee or to a local church foundation

UM Legacy Partners of The North Carolina Conference

slide41

What Does The Discipline Say, cont’d?

¶ 2533: A charge conference may establish a permanent endowment fund committee (PEFC) with responsibilities to:

1. Provide services described in ¶ 2532.5 as designated by donor or charge conference. Encourages use of a UM foundation.

2. Charge conference shall adopt PEFC guidelines on planned giving and/or permanent endowment fund (including administration).

UM Legacy Partners of The North Carolina Conference

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What Does The Discipline Say, cont’d?

¶ 2533, cont’d:

3. Emphasize to the congregation the need for all adults to have a will and an estate plan

4. Stress the opportunities for church members and constituents to make provisions for giving through UM churches, institutions, agencies,and causes by means of wills, annuities, trusts, life insurance, memorials, and various types of property.

UM Legacy Partners of The North Carolina Conference

slide43

What Does The Discipline Say, cont’d?

¶ 2533, cont’d:

5. Arrange for the dissemination of pre- retirement planning information: e.g., living will, living trust

6. Ensure PEFC members conform to charge conference actions, that members have no conflicts of interest, and that the permanent endowment document be changed to reflect any General Conference actions.

UM Legacy Partners of The North Carolina Conference

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What Does The Discipline Say, cont’d?

¶ 2533, cont’d:

7. Other responsibilities as determined by the charge conference

8. Resources for these tasks: UM foundations and development offices, National Association of UM Foundations, General Board of Discipleship, General Council on Finance and Administration, and other appropriate sources [e.g., UM Legacy Partners]

UM Legacy Partners of The North Carolina Conference

slide45

What Does The Discipline Say, cont’d?

¶ 2534: Local Church Foundations

Refer to Discipline text.

UM Legacy Partners of The North Carolina Conference

slide46

Legacy Partners Proposed Process

  • Form a small ad hoc committee with the Legacy Leader as chairperson. Include staff and lay people. Determine the status of Legacy Giving in the congregation.
    • Are there one or more accounts holding legacy funds (from bequests, trusts, income producing gifts, etc.)?
    • If so, is use of the funds designated or undesignated?
    • How are the funds invested?
    • Have the donors' wishes been met?

UM Legacy Partners of The North Carolina Conference

slide47

Proposed Process, cont’d

  • If the church has an endowment or legacy gifts committee, have that committee chairperson or a member of the committee be elected the Legacy Leader.
  • The named committee member would be responsible for interfacing with UMLP as he/she sees fit.
  • Additional responsibilities of the existing committee would be to work with UMLP to share successes in their church, to be a possible resource for others, and to consider additional ideas and expertise brought to the table by UMLP.

UM Legacy Partners of The North Carolina Conference

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Proposed Process, cont’d

  • Become educated about legacy giving through resources available from the United Methodist Foundation and UM Legacy Partners.
  • Draft a Legacy Program Charter for the church asking UMLP for help and using programs at other churches that have successful programs.

UM Legacy Partners of The North Carolina Conference

slide49

Proposed Process, cont’d

  • Upon formulation of a final Legacy Program Charter proposal, take it to the appropriate approving bodies within the church (e. g., Finance Committee, Administrative Council, Charge Conference).
  • Begin implementing the approved plan, educating church members, etc.
  • (Again, with the help of Legacy Partners, if needed).

UM Legacy Partners of The North Carolina Conference

slide50

Workshop and Discussion

UM Legacy Partners of The North Carolina Conference

slide51

Consideration: Does the church have the structure in place that allows the pastor to address these prospective donor questions?

  • If so, how can leaders help to ensure that the proposed legacy gift fulfills both the requirements of the donor and of the church?

UM Legacy Partners of The North Carolina Conference

slide52

If not, where can the pastor and church leaders get help?

  • What can the pastor and church leaders do to be prepared for inquiries from prospective legacy donors?

UM Legacy Partners of The North Carolina Conference

slide53

What Are the Answers?

Review

Example 1: One of your church members approaches your pastor and wants to include your church in his or her will. The gift will be a parcel of land currently worth $250,000.

Question: What should the pastor do?

UM Legacy Partners of The North Carolina Conference

slide54

Answer to Example 1

The pastor requests preliminary information from the donor. What are donor’s objectives, e.g., to make an outright current gift, an incoming-producing planned gift, or a bequest? Identify prospective donor’s professional advisors, if any. Get prospective donor’s permission to meet with church’s gift planning advisors, e. g. United Methodist Foundation gift planners. Make sure that all due diligence regarding the real estate is complete before the gift is accepted.

UM Legacy Partners of The North Carolina Conference

slide55

Review

Example 2: One of your members approaches your pastor and wants to make an income-producing gift of an appreciated asset to the church. The $100,000 asset currently produces very little income. How can the donor receive additional income and make a gift?

Question: What should the pastor do?

UM Legacy Partners of The North Carolina Conference

slide56

Answer to Example 2

The pastor relates to the prospective donor that there are several kinds of income-producing gifts. Suggest that the prospective donor meet with the church’s pastor and a gift planning advisor, e.g. a representative of the United Methodist Foundation, to explore alternatives and donor objectives.

UM Legacy Partners of The North Carolina Conference

slide57

For

Example 1

and

Example 2

Discuss use of the gift remainder after death(s) of donor(s) and any other income beneficiaries. Use can be undesignated to use where needed most or designated for a particular purpose, e.g. a mission endowment.

UM Legacy Partners of The North Carolina Conference

slide58

How to Get Help

UM Legacy Partners of The North Carolina Conference

slide59

How to Get Help

Get an appointment with a UM Foundation Planning Officer

Discuss gift planning needs

Ask planning officer to recommend one or more plans to meet needs

Planning Officer reviews results with pastor, prospective donor, and if appropriate others, e.g. Legacy Leader

UM Legacy Partners of The North Carolina Conference

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How to Get Help, cont’d.

Develop additional plans if needed

If prospective donor decides on a plan, review with his/her legal and financial advisors

Have legal and financial advisors develop plan details, if appropriate

UM Legacy Partners of The North Carolina Conference

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How to Get Help, cont’d.

If church, prospective donor, and the UM Foundation Planning Officer agree upon the plan, execute it with appropriate counsel.

UM Legacy Partners of The North Carolina Conference

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Contact Information

UM FoundationUnited Methodist Legacy Partners1307 Glenwood Ave.Suite 153Raleigh, NC 27605 (919) 836-0029

www.umf-nc.org

www.umlegacypartners.org

UM Legacy Partners of The North Carolina Conference

slide63

THANK YOU

For your interest in

The UM Foundation

&

Legacy Partners

All contributions are tax deductible to the extent allowable by law.

UM Legacy Partners of The North Carolina Conference