1. UM Legacy Partners of The North Carolina Conference 1 Legacy Giving in the Local Church United Methodist Legacy Partners of the North Carolina Conference

2. UM Legacy Partners of The North Carolina Conference 2 Background & Introduction Planned Gift Overview The Local Church Process Workshop and Discussion How to Get Help CONTENTS

3. UM Legacy Partners of The North Carolina Conference 3 Background & Introduction

4. UM Legacy Partners of The North Carolina Conference 4 “If those who ‘gain all they can’ 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

5. UM Legacy Partners of The North Carolina Conference 5 UM Legacy Partners Courtesy Motion Approved Unanimously at Annual Conference June 2006

6. UM Legacy Partners of The North Carolina Conference 6 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. Legacy Partners

7. UM Legacy Partners of The North Carolina Conference 7 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. Legacy Partners

8. UM Legacy Partners of The North Carolina Conference 8 Inform, encourage, and assist the local church in effective use of planned giving. Legacy Partners

9. UM Legacy Partners of The North Carolina Conference 9 Utilize the planned giving expertise of the agencies and institutions of our Annual Conference. Legacy Partners

10. UM Legacy Partners of The North Carolina Conference 10 Asbury Homes Camp and Retreat Ministries Duke Divinity School Louisburg College MERCI Methodist University Methodist Home for Children NC Conference of the UMC NC Wesleyan College UM Foundation, Inc. UM Retirement Homes Legacy Partners

11. UM Legacy Partners of The North Carolina Conference 11 Office of the Bishop Conference Commission on Stewardship Conference Office of Congregational Development Conference Director of Communications Conference Connectional Ministries Legacy Partners

12. UM Legacy Partners of The North Carolina Conference 12 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. Legacy Partners

13. UM Legacy Partners of The North Carolina Conference 13 Encourage each congregation to have a Legacy Leader: Learn about planned giving options Develop an ongoing endowment & planned giving initiative within the congregation. Legacy Partners

14. UM Legacy Partners of The North Carolina Conference 14 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 Legacy Partners

15. UM Legacy Partners of The North Carolina Conference 15 UM Legacy Partners: Conduct special training and information sessions through District workshops and other special regional gatherings Distribute supportive materials, videos, and online information. Legacy Partners

16. UM Legacy Partners of The North Carolina Conference 16 Encourage congregations to elect a Legacy Leader as soon as possible. Legacy Partners

17. UM Legacy Partners of The North Carolina Conference 17 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. Legacy Partners

18. UM Legacy Partners of The North Carolina Conference 18 Planned Gift Examples

19. UM Legacy Partners of The North Carolina Conference 19 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?

20. UM Legacy Partners of The North Carolina Conference 20 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?

21. UM Legacy Partners of The North Carolina Conference 21 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?

22. UM Legacy Partners of The North Carolina Conference 22 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?

23. UM Legacy Partners of The North Carolina Conference 23 Planned Gift Overview

24. UM Legacy Partners of The North Carolina Conference 24 For Planned (Deferred) Gifts, Donors Receive:  Satisfaction From Supporting a Favorite Church or Charity  Tax Advantages  Life Income  Income for Others

25. UM Legacy Partners of The North Carolina Conference 25 Some Assets to Use for Gifts Cash Securities Real Property  Personal Property  IRA’s and Retirement Plans  Life Insurance  Savings Bonds  Business Assets

26. UM Legacy Partners of The North Carolina Conference 26 Some Types of Planned Gift  Life Income Plans  Bequests  Life Insurance  Retirement Plans  Life-estate Agreements  Revocable Living Reserved

27. UM Legacy Partners of The North Carolina Conference 27 Some Life Income Plans  Charitable Gift Annuity  Charitable Remainder Unitrust

28. UM Legacy Partners of The North Carolina Conference 28 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 an Annuity

29. UM Legacy Partners of The North Carolina Conference 29 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

30. UM Legacy Partners of The North Carolina Conference 30 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

31. UM Legacy Partners of The North Carolina Conference 31 Gift Annuity Example John Jones 76 (25% Tax Bracket) 7.2% Annuity Property $50,000 Cash Income tax deduction of $20,465 may save $5,116. Property $50,000 One Life Annuity of $3,600 for life. Tax-free amount $2,502. Estimated one life payout of $45,720. Effective rate 9.9%. Remainder to Charity After one life, property to charity.

32. UM Legacy Partners of The North Carolina Conference 32 Living Unitrust Life Income John Jones 65 Mary Jones 60 Property $200,000 Trust Principal $200,000 6% Unitrust Two Lives Increased income from trust $12,000. Effective rate 6.52%. Charity $321,687 Remainder to Charity. Bypass of gain saves $32,000. Deduct $51,470.

33. UM Legacy Partners of The North Carolina Conference 33 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.

34. UM Legacy Partners of The North Carolina Conference 34 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

35. UM Legacy Partners of The North Carolina Conference 35 Give Through Retirement Plans  IRA  401 (K), 403 (B)…  Profit Sharing Plan  Tax Sheltered Annuity  Other

36. UM Legacy Partners of The North Carolina Conference 36 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

37. UM Legacy Partners of The North Carolina Conference 37 Life Estate Reserved John Jones 75 Mary Jones 70 Deed to Charity Trust Principal $200,000 Two Lives Income tax ded. of $56,000. Charity $200,000 After two lives, property to charity. Home or Farm $200,000 Deed to charity. Retain right to use property.

38. UM Legacy Partners of The North Carolina Conference 38 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

39. UM Legacy Partners of The North Carolina Conference 39 The Local Church Process

40. UM Legacy Partners of The North Carolina Conference 40 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

41. UM Legacy Partners of The North Carolina Conference 41 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).

42. UM Legacy Partners of The North Carolina Conference 42 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.

43. UM Legacy Partners of The North Carolina Conference 43 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.

44. UM Legacy Partners of The North Carolina Conference 44 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]

45. UM Legacy Partners of The North Carolina Conference 45 What Does The Discipline Say, cont’d? ¶ 2534: Local Church Foundations Refer to Discipline text.

46. UM Legacy Partners of The North Carolina Conference 46 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?

47. UM Legacy Partners of The North Carolina Conference 47 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.

48. UM Legacy Partners of The North Carolina Conference 48 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.

49. UM Legacy Partners of The North Carolina Conference 49 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).

50. UM Legacy Partners of The North Carolina Conference 50 Workshop and Discussion

51. UM Legacy Partners of The North Carolina Conference 51 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?

52. UM Legacy Partners of The North Carolina Conference 52 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?

53. UM Legacy Partners of The North Carolina Conference 53 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? What Are the Answers? Review

54. UM Legacy Partners of The North Carolina Conference 54 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. Answer to Example 1

55. UM Legacy Partners of The North Carolina Conference 55 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? Review

56. UM Legacy Partners of The North Carolina Conference 56 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. Answer to Example 2

57. UM Legacy Partners of The North Carolina Conference 57 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. For Example 1 and Example 2

58. UM Legacy Partners of The North Carolina Conference 58 How to Get Help

59. UM Legacy Partners of The North Carolina Conference 59 1. Get an appointment with a UM Foundation Planning Officer 2. Discuss gift planning needs 3. Ask planning officer to recommend one or more plans to meet needs 4. Planning Officer reviews results with pastor, prospective donor, and if appropriate others, e.g. Legacy Leader How to Get Help

60. UM Legacy Partners of The North Carolina Conference 60 6. Develop additional plans if needed 7. If prospective donor decides on a plan, review with his/her legal and financial advisors 8. Have legal and financial advisors develop plan details, if appropriate How to Get Help, cont’d.

61. UM Legacy Partners of The North Carolina Conference 61 11. If church, prospective donor, and the UM Foundation Planning Officer agree upon the plan, execute it with appropriate counsel. How to Get Help, cont’d.

62. UM Legacy Partners of The North Carolina Conference 62 Contact Information UM Foundation United Methodist Legacy Partners 1307 Glenwood Ave. Suite 153 Raleigh, NC 27605 (919) 836-0029 www.umf-nc.org www.umlegacypartners.org

63. UM Legacy Partners of The North Carolina Conference 63 THANK YOU For your interest in The UM Foundation & Legacy Partners All contributions are tax deductible to the extent allowable by law.