Gift Planning
Planned Giving
Find out what types of assets make the best planned gifts. Learn about gifts of cash, securities and property.
Bob and Mary Are Giving Smarter and Achieving Their Dreams...Find Out How You Can Too!
Bob and Mary first met at Two-Bit Flicks, a 25-cent movie night held on Fridays in Brighton Lecture Hall. When the spring formal hosted by the women's dorm came around, Mary asked Bob to go with her. It was their first "official" date.
The rest, as the saying goes, is history. Or in Bob and Mary's case, it is natural history. That's because Emporia State also introduced them to a lifelong passion for the natural sciences.
Bob and Mary feel Emporia State was the catalyst for the life they've built together. Mary became a science educator for 6th, 7th, 8th and 9th grade students. Bob founded and served as director of the Great Plains Nature Center and became a renowned nature photographer.
Now they want others to have the same opportunity they did. They want to help students come to ESU and discover a passion they can follow for the rest of their lives.
Bob and Mary found a simple and easy way to achieve this dream. When they set up their trust, they named Emporia State as a beneficiary.
What's your dream?
Learn how easy it is to make your dream a reality by naming Emporia State University in your will or trust. Contact Angela Fullen, Director of Planned Giving at the Emporia State University Foundation. She can answer your questions or help you get started. If you have already named Emporia State in your will or trust, let us know. We will make sure your gift does everything you want it to do.
"I would encourage anyone, if they are thinking about doing something like this, to contact the Foundation. For us, it has been a great experience." - Mary Butel
Getting Started is Easy
Not sure how to take the first step? We've got just the thing you need. Download your free Will and Estate Planning Guide. This guide is an easy way to get started on, or update, your estate plan. It will help you explore your options at your own pace. It's free, easy and yours to keep.
Download your copy today or contact Angela Fullen to request a printed copy.
Angela Fullen
Director of Planned Giving
Telephone: 620-341-6465
[email protected]
Personal Planner
Income for Surviving Spouse
Alexis also has an IRA. They jointly own their home, which is debt free, and have savings accounts, stocks and bonds.
If Elliot were to pass away first, Alexis would like to avoid paying additional tax. In addition to the IRA, Alexis already receives income from their investments.
Alexis said, "We seem to be paying a lot of income tax. When Elliot takes distributions from his IRA, that just pushes our income up higher and we pay more and more tax. Is there a way that I could reduce my income tax if Elliot passed away?"
A Solution for Alexis
Elliot could name Alexis as the designated beneficiary of his IRA. After Elliot passes away, Alexis may roll the IRA over. Alexis is age 73 and will soon be required to start distributions from the IRA. The added income would significantly increase Alexis' taxes.
A solution that gives Alexis protection and good flexibility is for Elliot to transfer his IRA to a special trust when he passes away. Under the design of this trust, Alexis could receive a 5% income payout or could encourage the trustee to invest for growth.
If Alexis decides to let the income grow inside the trust, it will grow tax free until more income is desired. At a future date, Alexis may decide that the balance of the estate is not producing as much income as desired, and could encourage the trustee to start making the payments. By that time, it is quite possible that the $600,000 would have grown and the trust payouts could be significantly greater.
How to Create the Trust
This trust has a special name. It is called a net income plus makeup charitable remainder unitrust. Elliot and Alexis talked to their attorney, George. He prepared a unitrust document that Elliot and Alexis signed.
Under their state law, this trust document is valid even though it is not yet funded. Elliot then selected the trust as the designated beneficiary for his IRA and Alexis consented in writing to that designation.
When Elliot Passes Away
If Elliot passes away first, Alexis will own the family home outright and will inherit their other assets, except the IRA. Elliot's IRA will be transferred directly to the unitrust. Because it is a net plus makeup unitrust, the trustee may discuss her goals with Alexis and then invest the $600,000.
Alexis' Options
Alexis may choose to allow the trust to grow for a period of time, if there is sufficient income from the IRA, Social Security and pension. However, if Alexis prefers to receive income from the $600,000 unitrust, then the trustee can invest to produce at least the 5% income and pay that amount to Alexis.
Alexis may decide to allow the trust to grow because there are modest expenses, no debt and sufficient income to enjoy annual traveling. At a future date Alexis could request the trustee change the investments from growth to income. For now, Alexis is comfortable with the trust investments in growth securities.
Saving Income Taxes
Because the growth of the trust is tax free and Alexis is not receiving substantial income from the trust, the income will be lower and there will be substantial tax savings. Alexis shared with their attorney, George, "I have more than enough and I could always spend a portion of my CDs if needed. It is a relief not to have the extra income and have to pay those high income taxes. Plus, I know that the trust is growing and I could receive a larger income in the future if needed."
Benefits for Family and Charity
If necessary in the future, Alexis will receive the income from the unitrust. However, Alexis may choose to allow the trust to grow and live on other income. When Alexis passes away, the trust principal plus growth will go to three favorite charities of Elliot and Alexis.
In addition, the children of Elliot and Alexis will also receive a substantial inheritance. The balance of the estate, including their home, CDs, stocks and bonds, will be divided between their two children.
Alexis is very pleased that income taxes will be reduced, and the estate total will be larger. Over time, the trust could grow quite substantially. The combination of security for Alexis, trust growth for charity and the benefits to family from the inheritance of the balance of the estate create a very good plan for Elliot and Alexis.
Previous Articles
Living Trust - Life and Death Decisions
