Estate Planning Opportunities for Believers… Salem Nazarene Foundation Presentation March 4, 2007

Five Reasons Not to Make a Will 1. The courts can do a better job deciding how to disburse your assets than you can. 2.The courts can choose a better personal representative to handle your estate during probate than you can. 3.The courts can choose a more caring guardian for your minor children than you can. 4. The government will use your estate tax dollars more efficiently than your church or favorite charity would use a charitable bequest. 5. Your grieving loved ones will be better off looking after your affairs without your will.

Incorporated September 1, 1983 The Foundation shares the vision statement of Salem First Church of the Nazarene to promote the long- term financial security and mission of the church. Salem Nazarene Foundation

2007 Board Members

The Bible Memorial Fund

In 2006, The Foundation... Gave an NIV Bible to each baptismal candidate for a total of 44 Bibles.

In 2006, The Foundation... Helped Matt Porters college class go on a Work and Witness trip to New Orleans.

In 2006, The Foundation... Helped Skyler Anderson fund his Project Amazon missionary trip.

In 2006, The Foundation... Established The Firm Foundation Endowment Fund.

In 2006, The Foundation... Hired Gene Christian to assist our congregation with estate planning. Over 22 years experience in planned giving and development. Leading regional authority in estate and charitable planning. Consultant for Luis Palau and various churches and para-church organizations. K. Gene Christian, BA, MEA.

Why So Much Attention On Estate Planning These Days? The Nation Is Aging Rapidly Overall Taxation Remains High Strength of Financial Markets Four Affluent Generations Alive Simultaneously Huge Transfer of Wealth Occurring 40% of Americans Have A Retirement Plan The Nation Is Aging Rapidly Overall Taxation Remains High Strength of Financial Markets Four Affluent Generations Alive Simultaneously Huge Transfer of Wealth Occurring 40% of Americans Have A Retirement Plan

GIVE IT TWICE A Unique Strategy in Estate Planning…

New Minimum Distribution Rules for IRAs Adopted Four Years Ago… Rational for Give it Twice

The Old Rule Rational for Give it Twice 90/90/90

The New Rule 90/90/ 180! Rational for Give it Twice

Sample for Give it Twice PROPOSED ESTATE PLAN PROPOSED ESTATE PLAN Stocks & Bonds Life Insurance Home Personal Effects REIT Shares Qualified Plan (IRA) 2nd Passing Give it Twice Trust (CRT) A substantial gift to Charity! 12 years pass 8% income each year for 12 years (Heirs)

Questions orComments?

Why So Much Attention on Estate Planning These Days? The Nation is Aging Rapidly Overall Taxation Remains High Strength of Financial Markets Four Affluent Generations Alive Simultaneously Huge Transfer of Wealth Occurring 40% of Americans Have Retirement Plan Real Estate Values Have Risen Tremendously The Nation is Aging Rapidly Overall Taxation Remains High Strength of Financial Markets Four Affluent Generations Alive Simultaneously Huge Transfer of Wealth Occurring 40% of Americans Have Retirement Plan Real Estate Values Have Risen Tremendously

A CASE ILLUSTRATION REAL ESTATE SALE WITH A CHARITABLE TWIST…

CASE PROFILE… Bob (age 59) and Alice (age 58) Auburn He owns/manages a small residential construction company She is an independent contractor currently consulting for ODOT

CASE PROFILE - cont. Nearing retirement - they want to travel more Dont want to dramatically affect childrens inheritance - close family

CASE PROFILE - cont. $200,000 life insurance on him $125,000 life insurance on her $328,000 his SEP-IRA $210,000 her 401(k) & IRAs from past employers $12,000 in ROTH IRAs $170,000 home paid off $320,000 rental properties (two homes) They have a $1,365,000 estate:

Rental properties A VISUAL LOOK AT THE AUBURNS ESTATE... Life Insurance Home ROTHS Her 401(k) & IRAs His SEP IRA

Sale vs. Unitrust I. Analysis of Increased Income… Sale vs. CRT Value of Rentals$320,000$320,000 Closing Costs ($ 22,400) ($ 22,400) Taxable Value $297,600$297,600

Sale vs. Unitrust I. Analysis of Increased Income Continued… Sale vs. CRT Taxable Value$297,600$297,600 Or. Cost Basis $ 88,000 N/A Cap. Gain Tax ($ 48,200) $ -0- Dep. Cost Basis $ 5,000 N/A Cap. Gain Tax ($ 26,500) $ -0-

Sale vs. Unitrust I. Analysis of Increased Income Continued… Sale vs. CRT Legal/App. Fees $ ? ($ 2,500) Investable Funds $ 223,000 $ 297,600 Pre-Tax Income $13,400 $ 17, YR Exp. $795,000$1,065,500 PV of Income $269,000 $ 365,500

TRADITIONAL WEALTH ACCUMULATION… TODAY NICE & BIG PERSONAL ESTATE 31.1 years pass 2037 AD

Adding the Charitable Dimension... CRT TODAY NICE & BIG ESTATE X BIG CRT 2037 AD …………………………………………………………………………. Even LARGER Overall Estate! = Rentals

Gift Annuities Charitable Retirement Planning Through...

Low Interest Rate Environment Continues… One-year CD rates under 3% Money market funds – 1% Ten-year Treasuries – 4% Thirty-year Treasuries – 4.5% Long-term Corporate Bonds – 4-5%

Challenge In Light of the Low Interest Rate Environment What Can You do?

Consider a Gift Annuity! Consider a Gift Annuity! Definition: …A simple contract between an individual(s) and a charity which provides three favorable outcomes by virtue of one financial transaction… …A simple contract between an individual(s) and a charity which provides three favorable outcomes by virtue of one financial transaction…

Gift Annuity Rates… AGE % % % % % % % Single Person Current Rates

Reasons People Do Gift Annuities… Good Source of Retirement IncomeGood Source of Retirement Income Replace Decreasing Bond or CD IncomeReplace Decreasing Bond or CD Income To Purchase Long-Term Care InsuranceTo Purchase Long-Term Care Insurance Supplemental Income for Parent or GrandparentSupplemental Income for Parent or Grandparent

Estate and Planned Giving Services… K. Gene Christian, BA, MEA K. Gene Christian, BA, MEA The Salem Nazarene Foundation The Salem Nazarene Foundation

Services Include… Free Will and Trust Planning Guide Free Estate Inventory Form Free Personal Planning Assistance

Questions orComments?

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