The Tip of the Iceberg! NWPGRT Annual Conference September, 2006

Why So Much Attention On Planning Giving These Days? The Nation is Age Rapidly Favorable IRS Tax Code (Section 664) Strength of Financial Markets During Last 20 Yrs Four Affluent Generations Alive Simultaneously Huge Transfer of Wealth Occurring 40% of Americans Have A Retirement Plan The Nation is Age Rapidly Favorable IRS Tax Code (Section 664) Strength of Financial Markets During Last 20 Yrs 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… Rationale for “Give it Twice”

The Old Rule Rationale for “Give it Twice” 90/90/90

The New Rule 90/90/ 180! Rationale 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)

Why So Much Attention on Planning Giving These Days? The Nation is Age Rapidly Favorable IRS Tax Code (Section 664) 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 Age Rapidly Favorable IRS Tax Code (Section 664) 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 Don’t want to dramatically affect children’s 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 AUBURN’S 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

LET’S REVIEW AGAIN…Why So Much Attention…? The Nation is Age Rapidly Favorable IRS Tax Code (Section 664) 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 Age Rapidly Favorable IRS Tax Code (Section 664) 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

What About the Future for More Traditional Fundraising Efforts? IT WILL BE INTERESTING! 501(c)(3)s will double in years Foundation Giving Trends Downward Donors Are Spreading Out Their Giving Small Amounts of Cash To Give IT WILL BE INTERESTING! 501(c)(3)s will double in years Foundation Giving Trends Downward Donors Are Spreading Out Their Giving Small Amounts of Cash To Give

Personal Observation… PLANNED GIVING is a fertile and growing field of opportunity while TRADITIONAL FUNDRAISING may become increasingly competitive during the next years.

Thank You for Attending this Session Today!