1. An Overview of Planned Giving Jackie W Franey
AASP Regional Workshop
Best Practices and Big Ideas in Development Operations
February 11, 2011

2. Gifts of Stock Securities are held two ways Physical certificates
physical certificates – in owner’s name
held by broker/DTC transfer – in street name
Physical certificates
require signature guarantee
stock power form
Valuation based on gift date
average of the high and low on date of gift
donor irrevocable transfers securities
mutual funds valued once per day

3. Types of Planned Gifts Revocable Gifts Irrevocable Gifts bequests
beneficiary designations
life insurance
Irrevocable Gifts
charitable gift annuities
charitable remainder trusts (CRTs)
charitable lead trusts
pooled income funds

4. Revocable Planned Gifts
Bequests
named as specific, residual or contingent
exact legal name
stewardship and cultivation important
Life Insurance
donor names charity as beneficiary
Retirement Plans
spousal waiver

5. Will and Revocable Living Trust
What type of bequest??
specific, percentage, residual, contingent?
what type of asset will you receive?
illiquid assets
expenses to maintain asset until you can sell
joint owner with other charities
IRS filing due??
estate tax return for estates over $5 million
Any legal issues to consider??
FASB and valuation requirements

6. Estimating the Value of a Bequest
Sometimes more art than science
determine net value from the inventory
preliminary estimate – what about debts and taxes??
certain percentage for services/expenses
subtract specific bequests
Reporting to Finance/FASB
Total Inventory Value $238,762.70
Admin Costs/Fees (10%) $ (23,876.00)
Total specific bequests $ (50,000.00)
Net residual value $164,886.70
x 25% remainder interest $ 41,221.68

7. Irrevocable Planned Gifts
Life Income Gifts
asset is used to establish gift, income to donor and/or other income beneficiary and remainder to charity
charitable remainder trusts
charitable gift annuities
Life Income Gift
asset is used to establish gift, income to charity and remainder to donor family
charitable lead trusts
Life Insurance
donor makes charity owner and beneficiary of policy
charity responsible for making premium payments
donor takes deduction, no “incidents of ownership”

8. Charitable Remainder Trusts
What type of trust??
Charitable trust established during lifetime
unitrust or annuity trust
donor retains the right to change remainderman
Testamentary trust
qualified charitable remainder trust
nonqualified with a charitable interest
perpetual trusts (payout income, principal untouched)
FASB requirements
if irrevocable remainder beneficiary
when no age of beneficiaries

9. Estate Settlement Overview of the Process
Notice of Administration
notification from personal representative/executor
copy of will or language
Named as Beneficiary
will, revocable trust, charitable trust, beneficiary designation, etc.
Inventory or accounting
provides estimate of length of process
provides estimate of distribution
Estimating the value of a bequest/distribution
Receipt and release

10. Basic Questions to Ask What assets are in the estate or trust?
anything new?
What assets were sold
for how much, to whom?
What debts, taxes and expenses were paid?
did charity pay taxes?
Was money reinvested?
how invested, what was the return?
how much income was received? Fees on income?
What will be distributed?
when? partial distribution?

11. Partnering with Finance
Procedures for recording gift
will declared valid by probate
no uncertainties receiving gift
amount of bequest can be determined
how value/distribution determined??
restrictions??
Audit approaches vary
Assessment of controls in place
calculations, expecting distribution, wording
Periodically review trust statements
fees, asset allocation, distributions