Intergenerational Wealth Transfer: Estate and Asset Gifts Leadership Conference

2. Gifts of Estates and Assets Leadership Conference September 26, 2012

3. Intergenerational Wealth Transfer $44 trillion to $135 trillion dollars in the next 50 years $6 trillion to $25 trillion dollars in charitable bequests alone

4. Intergenerational Wealth Transfer In Minnesota more than $47.9 billion will transfer from one generation to the next over the 20 years, 2011-2030

5. Charitable Giving Marketplace:Who Makes Charitable Gifts?

6. Where the money is

7. Charitable Giving Marketplace:Who Receives Charitable Gifts?

8. Everyone Can Make An Estate Gift

9. Fundraising Strategies

10. A Generation-Based Approach to Giving All donors find themselves at some stage of life…

11. …all donors have certain assets and income…

12. …all donors find a “home”

13. Common Donor Concerns • Dying too soon • Living too long • Illness or loss • Disability

14. Gift Planning Solutions

15. Charitable Gift Planning Vehicles

16. During Lifetime: Cash Stock – publicly traded or closely held Mutual Funds Real Estate Life Insurance Crops At Death: Retirement Plan Assets Bonds Life Insurance When Assets are Often Gifted

17. Types of Planned Gifts • Bequests • Beneficiary Designations • Life Income Gifts • Gift Annuities and Trusts • Gifts of Life Insurance • Retained Life Estates • Real Estate

18. Simple definition: “An asset in exchange for an income” Life Income Gifts

19. Life Income Gifts

20. Charitable Gift Annuity • Contractual promise to pay • Payments are fixed at the time of the gift • Usually provides tax-free income • Two types, payments can start now or later

21. Charitable Remainder Trusts Basic Concept: “The right to hold an asset can be separated from the right to receive income from the asset.”

22. Charitable Remainder Trusts • Common Elements • Irrevocable gift • Established either inter vivos or testamentary   • Income payments are made at least annually • The remainder beneficiary must be a charity • Income for lifetime or term of years

23. Charitable Remainder Unitrusts • Variable income stream • Additional contributions can be made • Minimum payout of 5% • 10% Rule • 4 types of unitrusts

24. Charitable Remainder Annuity Trusts • Fixed income stream • Cannot make additional contributions • 10% Rule • Charitable remainder • The 5% Probability Test • Corpus exhaustion

25. Retained Life Estate • Donate home to charity, but retain the right to live in it • Charitable deduction in the year the gift is made • Donor is responsible for maintenance, taxes and insurance • Property maintains homestead status

26. Case Studies

27. Donor Profile #1 “I want to make a gift, but I can’t afford to do so now.”

28. Solution: Estate Gift • Charitable bequest or • Beneficiary designation of • A will or trust • life insurance or • retirement plan assets

29. Donor Profile #2 “I have enough assets and I want to see my gift at work.”

30. Solution: Outright GiftCash vs. Stock Gift

31. Donor Profile #3 “I want to make a gift, but I really could use the income.” Donor Age 80 $10,000 cash

32. Solution: Charitable Gift Annuity $10,000 Cash 6.8% Charitable Gift Annuity Charity Remainder to charity $8,200 Donor Income tax deduction $4,607 Annual Income $680

33. Donor Profile #4 • Husband & wife, ages 70, 70 • $100,000 in appreciated stock • $10,000 cost basis • Currently receives 2% dividend • Would like more income

34. Solution: Charitable Remainder Unitrust $100,000 Property $ 10,000 Basis 5% Unitrust Charity Remainder to charity $149,729 Donor Income tax deduction $40,825 Gains not taxed $90,000 First Year Income $5,000

35. Solution: Charitable Remainder Unitrust

36. Most Important Factor • When making a charitable gift, donors rank the following factors in order of importance:

37. Thank You! Your thoughts?