Annual

Capital Planned

Give Out of Habit70%

Give Based on Emotion23%

Are Strategic Donors7%

Habitual

Strategic

Emotional

PlannedNet Worth

AnnualDiscretionary Income

? ? ? ? ? ? ? ? ? ?

… that must be answered for,

and by, clients who are strategic donors!!!

How much should I leave my heirs?

Do I have enough to live on for the rest of my life?

02

01

03Would I rather my executor or trustee write a check from my estate to the IRS, or to my favorite charities?

Self-directed charitable gifts

Government-directed tax

Financial independence

Inheritance for heirs

o Do the majority of planning clients list philanthropy as the major objective of estate planning?

o Are most parents concerned about giving all of their estate outright to heirs?

o Are trusts excellent tools for asset protection for heirs?

o Would planning clients rather give to the IRS or local charities?

100%

Outright Annual Lump

20% 40% 40%

Heirs

Planned gifts are often one of the results

of charitable estate planning!

Traditional Planned Giving

• Goal is to secure a gift• Informs donor about the benefits

of a particular type of gift• Based on the organization’s

needs• May generate a gift

Charitable Estate Planning

• Goal is to create the best plan for the donor

• Educates donor about how a gift fits into his or her objectives

• Based on the values of the donor• Typically results in large gifts

“Our donors appreciate the values-based approach to planning.” -Attorney & President of Private School

Past Gross Income:$47,000

7,80036,00012,000

$102,800

Farm$1,300,000

$1,300,000

CRUT (7%)

Charity

$90,000/Year

For the rest of her life

$588,000 Deduction

Avoid Cap Gains Tax

No Federal or State Estate Tax on CRUT

Current Gross Income:$47,000

90,00012,000

$149,000

81 Year Old - Single Woman$2.4 Million Estate, Low on Cash

No Federal Tax Illustration(Assumes $11,400,000 Fed. Exemption, 40% Estate Tax Rate, and 35% Income Tax Rate)

* Actual future tax rates may be higher or lower at time of death.

$5,800,000

Heirs$3,500,000

Current Planning*Heirs $ 4,338,861Charities $ 0Taxes $ 1,461,139

Taxes$0

Charity$2,300,000

No Federal Tax PlanHeirs $ 3,500,000Charities $ 2,300,000Taxes $ 0

Estate*IRD Assets $ 1,482,000Other $ 4,318,000

Testamentary Charitable Remainder Trust

* Actual future value of estate and gift may be higher or lower at time of death.** Income Tax calculated at a 28% rate*** Future Values discounted at 3.5% for inflation to arrive at present values

Estate$3,800,000

($2,000,000 in IRAs)

Remaining Assets$1,615,000

Current Planning*Heirs $ 2,890,000Charities $ 0Taxes $ 910,000

Heirs$3,340,000

Taxes$185,000 ET

Taxes$185,000

TCRUT$2,000,000

(7% ROI)

Recommended PlanHeirs $ 3,340,000Charities $ 2,896,000Taxes $ 185,000

Charity$2,896,000

5% payoutFor 20 yearsAfter Tax Total**$1,725,000

Present Value ofRecommended Plan***Heirs $ 3,340,000Charities $ 2,855,000Taxes $ 185,000

Retirement Accounts

Heirs$6,450,000

After Planning:Heirs $ 6,450,000Charity $ 2,400,000Taxes $ 450,000*

Before Planning:Heirs $ 7,200,000Charity $ 0Taxes $ 2,100,000

(potential immediate income & estate taxes)

Credit ShelterTrust

$3,500,000

Charity$2,400,000

Death of the first spouse

Death of the surviving spouse

Passes to Heirsfree of tax

Other Assets $ 2,375,000Life Insurance $ 4,525,000Retirement Accts. $ 2,400,000 Total Estate $ 9,300,000

Health, Education.Maintenance,Support

Taxes$450,000

$9,300,000

Surviving SpouseOutright

$5,800,000

100%

Outright Annual Lump

20% 40% 40%

Heirs