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Tri State - Basics of bequests Building a legacy society

Overcome fears and learn how to create lasting impact through bequests. Explore statistics, triggers, and characteristics of bequest donors.

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Tri State - Basics of bequests Building a legacy society

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  1. Tri State - Basics of bequestsBuilding a legacy society Copy of this presentation in PDF format available at: http://www.connellandassoc.com/Tristateafp

  2. Long arm of the IRS

  3. Bequests Overcome Fears • Fear of dying too soon • Fear of living too long • Fear of loosing control • Fear of economic misfortune • Fear of mental and/or physical disability • Fear of taxes consuming assets • The majority of bequests come from non-taxable estates

  4. Lifestyle triggers for adding bequestsRussell James studies, top 10 predictors • 1. Approaching death • 2. Becoming a widow/widower • 3. Diagnosed with cancer • 4. Decline in self-reported health • 5. Divorce • 6. Diagnosed with heart problems • 7. Diagnosed with a stroke • 8. First grandchild • 9. Increasing assets • 10. Increasing charitable giving • Source: American Charitable Bequest Demographics 1992-2012, 26,000 participants

  5. Lifestyle triggers for dropping bequestsRussell James studies, top 10 predictors • 1. Decline in self-reported health • 2. Approaching death (final pre-death survey) • 3. Becoming a widow/widower • 4. Divorce • 5. Diagnosed with cancer • 6. Diagnosed with heart problems • 7. Diagnosed with a stroke • 8. First grandchild • 9. First child • 10. Exiting homeownership • Source: American Charitable Bequest Demographics 1992-2012, 26,000 participants

  6. Bequest Statistics: Gifts by Will, Trust or Beneficiary Designation

  7. Bequest Statistics: Age of last will for bequest donors

  8. Bequest Statistics: Gifts by Will, Trust or Beneficiary Designation Estate exempt amount – $1,000,000 - $1,5000,000

  9. Average bequest size by charity operating budget

  10. Bequest Facts and Figures • 8% will include a charitable bequest • 50% of bequests come from nontaxable estates • 90% of bequests come from those who die after 70 • 77% - Idea came from donor (5% charity material) • 47% - Left specific amount • 51% - In will from 1-5 years • 9% - Bequest removed • 75% - Did not notify charity • 44% - 10% or less of estate NCPG Study 2000

  11. Characteristics of those most likely to make bequests • Length of giving, 5+ year • Giving over a long period of time, not every year • Frequency of giving • Is an active volunteer • Few family obligations • Securely retired • No heirs • Been kept informed • Has been called on regarding Planned Gifts and Bequests • Sixty-five year of age and over • Recognized by your organization Source: Jerold Panas, email

  12. Characteristics of those most likely to make bequests • 1. Donors with no children (or grandchildren) are more likely to make a planned gift than donors with children • 2. Donors with a college education (or post-graduate work) are more likely to make a bequest • 3. Donors who give above average annual gifts are more likely to become bequest donors • 4. Neither wealth nor income are predictors of bequest likelihood

  13. Characteristics of those most likely to make bequests • 5. Younger donors (age 40-60) are, in some respects, prime bequest prospects. This is a much younger age than previously thought • Source: Stelter: Donor insight report • 6. Although the number of donors saying they have made a charitable bequest is small, there is untapped potential in donors who have a will but have made no charitable provisions and among donors who have not yet made a will • Source: www.freewill.com • 7. Donors who are also volunteer and donors with long loyalty are better bequest prospects

  14. Bequest intentions & potential Source: Center on Philanthropy at Indiana University, 2006

  15. Gifts by Will, Trust or Beneficiary Designation • 1. Bequest of specific $$$$$ amount or specific property • Example: $10,000 to favorite charity or my house at 123 Main Street to favorite charity • 2. Bequest of a specific percentage amount of estate assets • Example: 25% of my estate to favorite charity and the balance to my church • 3. Residuum of specific amount or percentage • Example: 25% of estate after specific bequests to friends and family to favorite charity

  16. Gifts by Will, Trust or Beneficiary Designation • 4. Contingent bequests • Example: If my brother does not survive me I give his share to my favorite charity • 5. Life insurance beneficiary designations • Specific amount or percentage • New or existing policy • Charity owner and beneficiary with donor paying premiums makes the premium deductible 17

  17. Gifts by Life Insurance Options • Partial policy transfer • Divide existing policy and transfer ownership and beneficiary • Premiums paid to charity, full charitable deduction • New policy • Ownership and beneficiary • Donor pays premiums to insurance company • Current charitable deduction • 30% AGI – “for the use of gift” • Donor makes gift to charity to pay premium due • Fully deductible • New policy keep ownership beneficiary charity • No charitable deduction

  18. Gifts by Life Insurance Options • Drs. Rick and Danyel • Ages 41 & 38 • Committed to medical center • Wish to be Legacy Society participant • Options: Bequest or life insurance • $250,000 joint & survivor policy • Payable over 7 years • Annual premium $3,042, $253/month

  19. Gifts by Life Insurance Options • Joann & Terry Adams • Ages 55 & 56 • Hospital CEO & independent energy consultant • Wish to participate in new Legacy Society • Options: Retirement gift annuity funded with $10K+ and/or life insurance • $100,000 5-pay Universal Life policy guaranteed to 105 on Joann’s life • Annual premium $4,319

  20. Gifts by Will, Trust or Beneficiary Designation • 6. Retirement plan beneficiary designations • Specific amount or percentage • IRA, 401(k), 403(b), Roth IRA, Keogh plans • Recommended because of possible double taxation • 7. Pay on death for bank accounts • 8. Transfer on death for investment accounts • Link to 3 Crescendo articles on POD and TOD options • www.connellandassoc.com/articles.html

  21. Gifts by Will, Trust or Beneficiary Designation • 9. Provide an income & property to a spouse, children, grandchildren, or others and then provide a gift to charity • Testamentary gift annuity • Testamentary Unitrust or Annuity Trust • 10. Disclaimer • 11. Testamentary gift that provides an income to your charitable interests for awhile and then provide the property to your children, grandchildren or others • Testamentary Charitable Lead Trust

  22. Legacy Societyhttps://www.svwc.org/wp-content/uploads/2017/01/Legacy-Society-brochure-rev.-1-17.pdf

  23. Legacy Societyhttps://www.svwc.org/wp-content/uploads/2017/01/Legacy-Society-brochure-rev.-1-17.pdf

  24. Beacon Society

  25. Beacon Society

  26. Bequest handouts, pdf for websites http://futurefocus.net/Haven/HavenHospiceBequestArrangements.pdf

  27. Gilda ClubLegacy Circle brochure http://www.connellandassoc.com/Newsletters/February2019issue.htm

  28. Gwinnett Medical Center Foundation – Legacy Circlehttp://www.connellandassoc.com/Newsletters/October2017issue.htm

  29. Codicil to Last Wall and Testament to web siteCommunity Foundation of Northern Shenandoah Valleyhttps://cfnsv.org/discover/forms/

  30. Develop a WORD handout on bequests& pdf for websiteshttp://futurefocus.net/Haven/HavenHospiceBequestArrangements.pdf

  31. Criteria for membership • 1. Individual has remembered the charity in their estate plan. • 2. Charity has documented confirmation of the inclusion in estate plan. • 3. Estate inclusion may be by bequest in a will or trust, a bequest substitute such as a beneficiary designation of a life insurance policy; retirement plan account; or paid/transfer on death designation, life estate or other acceptable arrangement.

  32. Criteria for membership • 4. Establishing a charitable gift annuity. • 5. Establishing a charitable remainder trust. • 6. Establishing a charitable lead trust. • 7. Establishing a endowed fund at the charity. • 8. All estate distribution since the inception date (DATE) or as far back as quality records would dictate) will be included with the designation Benefactor.

  33. Legacy Society recognition wallhttps://www.mcleodhealth.org/foundation/ways-to-donate/legacy-giving/fh-mcleod-legacy-society-membership/

  34. Annual society dinner or lunchhttps://www.mcleodhealth.org/foundation/ways-to-donate/legacy-giving/fh-mcleod-legacy-society-membership/

  35. Website listing

  36. Radio script for promoting estate planning

  37. Radio script for promoting having a will

  38. Simple Marketing Opportunities • 1. Consider a bequest campaign to increase you living endowment • 2. Put - “Remember XXXXXX in your will or living trust and estate plan” on your letterhead. • 3. Put - Bequest wording examples on your web site. Be sure to include your exact name and tax exempt number in wording. • Revise if you change your name or merge

  39. Simple Marketing Opportunities • 4. Print – Sample bequest wording flyer and send it to all attorneys and professional advisors in your area (see handout) • 5. Write – Separate articles on each type of bequest options • 6. Write – Stories on bequests received

  40. Simple Marketing Opportunities • 7. Stuff – Bequest options flyer in gift thank you notes or receipts • 8. Place – Bequest society brochures in a convenient place next to recognition plaques or on a brochure takeaway table • 9. Web site – Put current Bequest Society brochure as a downloadable file

  41. Simple Marketing Opportunities • 10. Web site - Put downloadable file of bequest flyer developed for professional advisors • Add a codicil example in print format • 11. Web site - Put current list of bequest society members on your web site • Alternative is a PDF download file of current and deceased members • Add pictures of current members being inducted to society at your recognition event

  42. Simple Marketing Opportunities • 12. Web site – Construct a mission video for your main page or development page which links to your support/ bequest /planned giving pages • 13. Social media – Place a bequest story on your social media page • 14. Social media - Construct an estate planning quiz that drives inquires to your web site Keep in contact with your bequest donors

  43. Web site providers • Crescendo Interactive www.crescendointeractive.com • Various costs estimate $5,000 • Future Focus www.futurefocus.net • Set up $500, Annual $799, plus optional calculator • Sharpe Group • www.sharpenet.com • Various costs estimate $5,000, includes calculator • Stelter Group • www.stelter.com • Various plans estimate $2,000 - $5,000 • Virtual Giving • www.virtualgiving.com • Various plans estimate $2,000 - $5,000 • Plannedgiving.com • Bequest: Three (3) year license with no yearly fees until year 4, if you decide to keep it ($795 per year only!) • Other sites at higher costs

  44. Basics of bequestsBuilding a legacy society Thank You

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