1. Gift Development Planned Giving Presented By

2. Gift Planning starts with God’s Word Command those who are rich in this present world not to be arrogant, nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life. 1 Timothy 6:17-19 You’re not livin’ ‘til you’re givin’

3. The LCMS Definition of Stewardship “Stewardship is the free and joyous activity of the child of God and God’s family, the church, in managing all of life and life’s resources for God’s purposes.”

4. The LCMS Foundation’s promise to ministry and members The Foundation is the only LCMS organization that offers comprehensive charitable expertise and services to help you plan and direct your passion for giving to family and all ministries of the church today, tomorrow and forever.

5. The Foundation helps plan and direct passions for giving Gifts Today- direct gifts which provide an immediate benefit to ministry Gifts Tomorrow- deferred gifts which provide a future benefit to ministry Gifts Forever- gifts which provide a perpetual benefit to ministry

6. The Foundation helps members with their Lifetime Plan for Giving TM Nationally deployed Gift Planning Counselors assist members in all aspects of Christian estate planning A Lifetime Plan for Giving is a comprehensive estate plan summarized for a family Plans include testamentary family and ministry support Gifts for today, tomorrow, and forever are often included in the plan.

7. A Lifetime Plan for Giving supports family and ministry through Foundation gift vehicles Unitrust Pour-over Unitrust Annuity Trust Lead Trust Gift Annuity Pooled Income Fund Donor-Advised Family Gift Fund Life Estate Endowment/Memorial Fund Direct Gifts of cash or property

8. The Lifetime Plan for Giving process is four parts Discovery- A survey gathers information on the donor’s family, assets, and stewardship goals Proposal- Multiple plans are drafted to best meet the donor’s goals and objectives Summary- The selected plan is drawn up as a comprehensive summary Implementation- The donor utilizes professional advisors to legally draft and complete the plan

9. A Lifetime Plan for Giving incorporates the estate distribution vehicle Will- public legal expression of declaration of our wishes as to the disposition of your property after death Revocable Living Trust- private legal entity that holds title or ownership of property and assets

10. An illustrated summary of a Lifetime Plan for Giving is provided Estate distribution vehicle (living trust) Summary of assets Funded gift vehicles Timeline of funding Resulting gifts to family and ministry

11. God is a Giving God In the beginning God created man in His image and His likeness. We were re-created anew in His image at our baptism. We are, by our new creation, giving people.

12. Three commonly used Foundation gift vehicles in a Lifetime Plan for Giving Charitable Gift Annuity (contract) Charitable Remainder Unitrust (straight-pay trust) Donor-advised Family Gift Fund (form of an endowment) *Case studies provide illustration

13. What is a Charitable Gift Annuity? A Gift Annuity is a contract obligating the Foundation to pay someone (annuitant) a fixed dollar amount for life in exchange for the donor’s original contribution. When the contract terminates, whatever is left of the original contribution is distributed to ministry. The donor’s age determines the fixed amount

14. Charitable Gift Annuity Case Study: Paul and Elaine

15. Paul and Elaine’s Gift Plan Retired, liked to travel & need more income Own bank CDs Want an income tax deduction Want to make a deferred gift to their local congregation

16. Gift Annuity illustration Paul age 83 - Elaine age 79 Income Tax Deduction $20,527 After two lives, annuity remainder to ministry Two Life 7.1% Annuity Cash $50,000 LCMS Foundation Gift Annuity $50,000 Annual Income $3,550 Local Congregation $25,000

17. Paul and Elaine’s Lifetime Plan for Giving

18. What is a Charitable Remainder Unitrust? A Charitable Remainder Trust is a descriptive title for a trust which pays to an individual or individuals and when the trust terminates, whatever is left in the trust (the remainder) is distributed to ministry. A Unitrust pays a percentage of the trust value. The trust is valued at the beginning of each year to determine the payout for that particular year.

19. Charitable Remainder Unitrust case study funded with appreciated property: Harold

20. Harold’s Gift Plan A widower, his children aren’t farmers and he is concerned about them arguing over the sale of the farm if received through his estate Doesn’t want to pay the capital gains tax if the farmland is sold now and proceeds reinvested Wants to increase his retirement income, and reduce management worries Wants to benefit children with a stream of income and make deferred gifts to his favorite LCMS ministries

21. Tax implications with selling the farm Current value of Harold’s farm $320,000 Cost basis -$100,000 Capital Gain $220,000 Capital gains tax $220,000 x 15% tax rate = $33,000 Solution: Gift the farm during life to the LCMS Charitable Trust

22. Charitable Unitrust illustration Harold age 70 First year income from trust $16,000 to $20,800. Previous income $12,800 (4%). $33,000 savings on capital gains tax! Total projected trust income $384,000 Farmland $320,000* Cost $100,000 One Life and 20 years to children *160 acres at $2,000 per acre Charitable Trust $320,000 6.0% Ministries of his choice $320,000

23. Harold’s Lifetime Plan for Giving

24. What is a Donor-advised Family Gift Fund? A Donor-advised Fund is a descriptive name for an endowment fund where an advisor can offer advice as to when, how much, and to whom, distributions should be made. Foundation Family Gift Funds must distribute 51% to LCMS-related ministries Fund may pass on to heirs

25. Family Gift Fund case study: Ken and Marion

26. Ken and Marion’s Gift Plan Don’t need income for present needs Want to take advantage of tax free transfer to ministry Don’t want to give all to ministry right now Want to make gifts to various ministries over time Want to transfer charitable gifting attitude to children Can use charitable gift deduction for increased income and more gifting

27. Family Gift Fund illustration Ken and Marion Allows gifts of appreciated property to be made and distributed to different ministries over time. Retirement Plans $531,038 Children $1.1 million Gifted at donor’s request Family Gift Fund $531,038 Ministries $531,038 Estate $1.7 million

28. Ken and Marion’s Lifetime Plan for Giving

29. Questions or Comments? Terry Gerdts The LCMS Foundation 1333 S. Kirkwood Rd. St. Louis, MO 63122 1-888-838-2898 Terry.Gerdts@lcms.org