W f r o m e x c e p t i o n a l GIFT PLANNING Doing Well by Doing Good Make your family’s life better ... make Willamette better forever. GIFT PLANNING Mr. Franklin would be tickled to know that today’s planned gifts can yield real monetary returns for you while helping to — Benjamin Franklin educate young people. Gift planning enables anyone — regardless of net worth — to make a meaningful contribution to the future of Willamette University. Gift planning also enables you to craft a personal legacy. You can direct planned gifts to the University programs of your choice. As the following pages illustrate, you can make a gift to Willamette that pays income to you and your loved ones for life. If you are thinking about selling real estate, stocks or other appreciated assets, this booklet will explain better ways than selling the property outright, which will enable you and the University to profit. For those with grandchildren, you’ll see how one Willamette alumna is using a charitable gift annuity to provide for her grandchildren’s college educations. For wealthy individuals, the Office of Gift Planning can show you how to use one of the last legal ways to pass large sums of money to your children and grandchildren free of gift and estate tax. You may also gain significant tax advantages by contributing non-cash assets. For instance, full or partial interests in real estate, stocks or bonds, life insurance policies and retirement accounts make excellent gifts. Perhaps the most important thing you can do for Willamette’s future is to designate the University as a beneficiary in your will, your living trust, your IRA, 401(k) or other retirement account, or in your life insurance policy. It’s easy to leave a legacy at Willamette — and help yourself and your family in the process. Please contact us to discuss in confidence some of the many ways to make the future brighter. “An investment in knowledge always pays the best interest.” Steve Brier Director of Gift Planning Shannon Christianson Assistant Director of Gift Planning W LIFE-INCOME PLANS ’ Tis better to give AND receive. ee ’50 and Nelda Svarverud believe in life-income plans. During the past four years, they have established five gift annuities at Willamette. The annuities pay the Svarveruds guaranteed monthly income for life, at rates between 7.2 percent and 7.6 percent. When the annuities end, the Svarveruds’ contributions will become part of Willamette University’s permanent endowment, creating a gift that will last forever. Life-income plans are simple. You contribute cash or other property to Willamette. In exchange, Willamette provides you and/or your family with income for life (or a period of time you specify). With a charitable gift annuity, the income amount is fixed and guaranteed for life. With a charitable remainder unitrust, your income is tied to “Charitable gift annuities fit into Willamette’s investment returns. In either case, life-income our plans just right.” plans can provide you with: — Leland Svarverud ’50 L • High income for life • Immediate income tax deductions • Freedom from capital gains tax on contributed property Afterward, your contribution becomes part of Willamette’s endowment — a gift that keeps giving — and will be used in accordance with your wishes. Life-income plans, for example, can create named endowed scholarships or endowed faculty chairs. Or they can add to existing funds, such as 50th reunion class gifts. With a unique twist, a life-income plan can enable wealthy individuals to make substantial deferred gifts to their heirs and avoid gift and estate taxes. This perfectly legal technique is called a charitable lead trust. Under this plan, Willamette receives income from the trust during the donor’s life — or during a specified time period. Afterward, the trust assets are distributed to the donor’s specified heirs. In the right circumstances, a lead trust can be the most effective way to pass assets to heirs tax free. Life-income payout rates and income tax deductions vary depending on your circumstances. Willamette’s Office of Gift Planning would be pleased to help you design a life-income plan that best fits your goals. Did You Know? • • • • You can set up a Willamette gift annuity with as little as $5,000. You can include your spouse and other loved ones as beneficiaries of life-income plans. You can make a contribution now and defer the income starting date to increase your income. You can convert securities or real estate into a Willamette life-income plan without paying capital gains tax. Barbara (Dennis) Barrie ’59 recently found a creative way to make a charitable gift annuity support her grandchildren and contribute to her class gift. “The annuity was such a smart way to support our class reunion gift, I didn’t want to pass it up,” she says. When Barbara funded her annuity in 2004, she had no real need for the periodic annuity payments. Shortly after receiving her first payment, she decided to use it to create a college textbook fund to help her grandchildren through college. She expects her annuity payments to keep the college fund growing until all of her current and future grandchildren finish college. The gift itself will add to the Class of 1959’s reunion gift to Willamette. The Office of Gift Planning can help you learn about the many ways to provide for your children and grandchildren as you support Willamette University. “I appreciate the many tax beneﬁts and the secure lifelong income provided by my gift annuity. I am more grateful, however, for the opportunity to do something in Dix’s memory and for a good cause.” — Winston Taylor ’42 “The unitrust enlarges and perpetuates the Hines-Burgoon Fund while providing us with a lifetime income supplement and major tax savings. The unitrust also enabled us to contribute to other charities in addition to Willamette.” — Hal and Ellie Peters “It was a no brainer for us. After all of the beneﬁts were explained to us, we wished we had done it long ago.” — Jack ’51 and Jean (Stewart) ’53 Brown Winston Taylor was a friend of Dix Moser ’44, who died serving our country in World War II. Winston designated his gift annuity to add to the Dix Moser Scholarship Fund, which was established by Dix’s former girlfriend, Jean (Fries) Moore ’45. Hal Peters is the third great-grandnephew of Gustavus Hines, one of Willamette’s founders. Hal and his wife, Ellie, funded a unitrust with rental property. The unitrust ultimately will provide additional funding for the Hines-Burgoon Fund, established by their daughter, Alicia, to support students in religious studies. Jack and Jean converted shares of appreciated stock into a Willamette gift annuity. The annuity guarantees income to the Browns throughout their lives. Afterward, their contribution will be added in equal shares to the Class of 1951 and Class of 1953 Scholarship Funds. W WHERE THERE’S A WILL, THERE’S A WAY Leave a lasting legacy. veryone — regardless of the size of their bank account or investment portfolio — can leave a lasting legacy at Willamette. A bequest in a will or living trust enables you to make a significant, enduring contribution to Willamette. You also retain full control over your assets during your lifetime to provide for the changing needs of your family. Estate gifts have played an important role throughout Willamette’s history. Bequests were integral to financing the construction of campus buildings such as the Putnam University Center. Bequests have been instrumental in raising the endowment — Willamette’s financial backbone — to its current level. Many people are surprised to learn that charitable bequests can be an effective tax-planning tool. By making a bequest to the University in your will or living trust, you could significantly reduce your estate taxes. Regardless of your charitable intentions, you should have “I realize that great institutions like Willamette begin on a will or living trust in place a vacant lot, that our founders created an institution for to protect your family and people they will never meet, planted trees they will never sit to ensure that you, not the under and built buildings they will never visit.” state, determine the legacy — U.S. Congressman Sam Farr ’63 you leave. Attorney fees for drafting a will or living trust are typically modest. If you have an existing will or living trust, your attorney can easily add a provision for a bequest to the University. If you wish, you can designate a specific University program or fund to benefit from your bequest. Even seemingly small bequests to Willamette can make a meaningful difference in the lives of future students. E Did You Know? Bequests can take many forms: • • • • Percentage Bequest: Willamette receives a specified percentage of your estate. General Bequest: Willamette receives a specified amount of money. Specific Bequest: Willamette receives a specific asset. Residuary Bequest: Willamette receives the balance of your estate (or a portion of the balance) after all percentage, general and specific bequests have been satisfied. • Contingent Bequest: You direct special stipulations; for example, you could stipulate that Willamette receive a portion of your estate only if your spouse is no longer living. Dave Novotney ’85, assistant superintendant of the Willamette Education Service District, has provided for Willamette through a contingent bequest in his will. If Dave’s mother survives him, she will be his beneficiary. If Dave’s mother predeceases him, his estate will go to Willamette to establish the Dave C. Novotney Scholarship Fund. Dave says, “The bequest is the best of both worlds. I can use my immediate resources to support K-12 education, while making a much larger donation to higher education at Willamette through my bequest.” In 2005 Margaret (Lewis) Hathaway ’28 passed away shortly before her 98th birthday. No one lived a fuller life or made better use of her Willamette education. Margaret spent most of her working life in China and Africa helping people — primarily women — create better lives for themselves. Margaret once remarked, “I value Willamette for the education I received, but even more for its mission of providing a liberal arts education with a tradition of service.” Margaret left another legacy — a $100,000 bequest to establish an endowed fund for scholarships and other activities to support international relations. Her generosity will strengthen Willamette’s mission immensely. W APPRECIATED PROPERTY Willamette offers more. arry and Charlene Slack recently discovered a smarter way to sell real estate. They sold their rental property tax free through a Willamette unitrust. In exchange, Willamette is paying them generously over their lifetimes. The bonus for the Slacks is that they completely avoided capital gains tax and they received substantial current income tax deductions. In addition to helping their bottom line, their unitrust will establish a perpetual endowed scholarship fund to help educate future generations of deserving young people. A unitrust can provide you with: • Increased income for life • Immediate income tax deductions • Freedom from capital gains tax L The unitrust was really an economic decision. If we had sold the properties on our own, we’d have significantly less to show for it. — Charlene and Larry Slack Your unitrust can also provide funding for Willamette programs you choose to support. It sounds almost too good to be true, but you really can help yourself and help the University with a unitrust. If you wish, the income stream from a unitrust can provide for your children or grandchildren. In addition, a unitrust can be funded either during your lifetime or through your estate to ensure that your heirs receive consistent income over a speciﬁed period of time, rather than receiving a lump sum inheritance. In short, unitrusts oﬀer an array of planning opportunities to provide ﬁnancial security for you and your family. Virtually any type of real property — as well as appreciated stocks, bonds or mutual funds — can be sold tax free through a Willamette unitrust. It’s just a paper transaction, and Willamette will do the paperwork. Appreciated assets also provide a double tax beneﬁt when used to make an outright gift. In addition to an immediate income tax deduction equal to the fair market value of the property, you can avoid capital gains tax on the property’s appreciation. Despite the market’s ups and downs, many people hold investments with a sizeable amount of built-in appreciation. You should always consider a gift of appreciated property as a possible alternative to a large cash gift. Whether used to fund a unitrust or as an outright gift, appreciated assets must be transferred directly to Willamette to secure the tax advantages. If you would like to avoid capital gains tax and make a lasting contribution to Willamette, please contact the Oﬃce of Gift Planning for a conﬁdential consultation. Did You Know? • An outright gift of appreciated property or securities is better tax-wise than writing a check. • You can include other charities as ultimate beneficiaries of a Willamette unitrust. • You can use a partial property interest to fund a unitrust, while you “cash out” your remaining interest in the property. • You can sell all or part of a closely held business through a Willamette unitrust. W RETIREMENT ACCOUNTS Give to Uncle Sam or give to Willamette University. leanor (Todd)Wilson-Berg ’44 chose one of the smartest and easiest ways to leave a legacy at Willamette. She designated Willamette as a partial beneficiary of her IRA account. It was smart because a major portion of Eleanor’s IRA funds otherwise would have been consumed by taxes. It was easy because all she did was complete three lines on a form provided by her IRA account administrator. Retirement assets — IRAs, 401(k) and “Creating an endowed scholarship at Willamette 403(b) plans, Keogh plans and other using my retirement funds has been a wonderful pension and profit-sharing plans — are opportunity. It has allowed me to invest a part of subject to a double tax that often my estate in something I care about and I know depletes retirement assets remaining it’s going to help people for many, many years.” at death. If the ultimate beneficiary of — Eleanor (Todd) Wilson-Berg ’44 your retirement assets is an individual, the beneficiary (even if the beneficiary is your spouse) usually pays income tax on receipt of the assets. In addition, if the beneficiary is anyone other than your spouse, the assets may be subject to estate tax. At current tax rates, up to 75 percent of your assets could be lost to taxes before your heirs receive anything. Retirement assets often are the most tax-efficient assets to leave to Willamette. Instead of losing your retirement funds to taxes, you can designate Willamette as a beneficiary. At your death, the entire portion designated to Willamette will go to support the University. No income or estate tax will be assessed against the assets you give to Willamette. You don’t need to revise your will or living trust to direct retirement assets to Willamette. Just complete a simple beneficiary designation form from the person or institution that administers your retirement plan. Some people may choose to donate part of their retirement assets to Willamette during their lifetime. The Office of Gift Planning or your financial advisor can advise you about the tax consequences of making lifetime withdrawals from retirement funds. E “I am led to the belief that what is placed as permanent endowment for education is the highest contribution that I can make to my fellow man. Nothing less than the best that I can do is adequate.” — R.A. Booth .. The R.A. Booth Society honors alumni and friends of Willamette University who have made planned gifts to the University, such as bequests, gift annuities, charitable trusts and gifts of life insurance policies or retirement assets. R.A. Booth (1858–1944) was an early University trustee who was the driving force behind the creation and growth of Willamette’s endowment. If you have provided for the University in your will, living trust or other planned gift, please contact us to be included in the R.A. Booth Society. Endowed Scholarships College of Liberal Arts ...................... $30M College of Law ................................... $4M Atkinson Graduate School of Management ................................... $2M Academic Excellence College of Liberal Arts ...................... $31M College of Law .................................. $10M Atkinson Graduate School of Management ................................... $5M Technology Innovation Facilities University-wide ................................. $12M University-wide ................................. $21M Annual Giving College of Liberal Arts ..................... $8.5M College of Law .................................... $1M Atkinson Graduate School of Management .................................. $.5M Total ............................................... $125M Willamette University is engaged in a historic $125 million comprehensive campaign. For all involved, it is a campaign of opportunity. For those individuals who wish to support Willamette, the campaign oﬀers limitless opportunities to give gifts that beneﬁt both you and the University. The Oﬃce of Gift Planning can help you plan the gift that is right for you and your family. On behalf of the students, faculty, staff and alumni, thank you for your generosity and your commitment to the future of Willamette University. Phone 866-204-8102 Email firstname.lastname@example.org Web www.willamette.edu/giftplanning WILLAMETTE UNIVERSITY COLLEGE OF LIBERAL ARTS COLLEGE OF LAW ATKINSON GRADUATE SCHOOL OF MANAGEMENT SCHOOL OF EDUCATION Willamette is the first university in the West, founded in Salem, Oregon, in 1842.