Legacy Giving in the Local Church United Methodist Legacy Partners of the

Legacy Giving in the Local Church United Methodist Legacy Partners of the North Carolina Conference UM Legacy Partners of The North Carolina Conference

CONTENTS • Background & Introduction • Planned Gift Overview • The Local Church Process • Workshop and Discussion • How to Get Help UM Legacy Partners of The North Carolina Conference

Background & Introduction UM Legacy Partners of The North Carolina Conference

“If those who ‘gain all theycan’ and ‘save all they can,’ will likewise ‘give all they can,’ the more they gain, the more they will grow in grace, and the more treasure they will lay up in heaven.” — John Wesley UM Legacy Partners of The North Carolina Conference

UM Legacy Partners Courtesy Motion Approved Unanimously at Annual Conference June 2006 UM Legacy Partners of The North Carolina Conference

Legacy Partners Nurture the Christian concept of stewardship of all the gifts God has given us—time, talents, and resources, including accumulated, inherited, and appreciated financial assets. UM Legacy Partners of The North Carolina Conference

Legacy Partners Support the future mission and work of our local churches and the wider work and service of the United Methodist Church through planned giving, including wills, bequests, and trusts. UM Legacy Partners of The North Carolina Conference

Legacy Partners Inform, encourage, and assist the local church in effective use of planned giving. UM Legacy Partners of The North Carolina Conference

Legacy Partners Utilize the planned giving expertise of the agencies and institutions of our Annual Conference. UM Legacy Partners of The North Carolina Conference

Legacy Partners Asbury HomesCamp and Retreat MinistriesDuke Divinity SchoolLouisburg CollegeMERCI Methodist University Methodist Home for ChildrenNC Conference of the UMCNC Wesleyan CollegeUM Foundation, Inc.UM Retirement Homes UM Legacy Partners of The North Carolina Conference

Legacy Partners • Office of the Bishop • Conference Commission on Stewardship • Conference Office of Congregational Development • Conference Director of Communications • Conference Connectional Ministries UM Legacy Partners of The North Carolina Conference

Legacy Partners • Provide planned giving information, training, and inspiration to congregations: • Encourage and support special ministries and enlarged outreach services • Include the mission and ministries of the United Methodist Church and its agencies and institutions. UM Legacy Partners of The North Carolina Conference

Legacy Partners • Encourage each congregation to have a Legacy Leader: • Learn about planned giving options • Develop an ongoing endowment & planned giving initiative within the congregation. UM Legacy Partners of The North Carolina Conference

Legacy Partners • Congregations that already have an active endowment & planned giving program: • Name a Legacy Leader for ongoing local leadership • Share experiences and best practices with other congregations UM Legacy Partners of The North Carolina Conference

Legacy Partners • UM Legacy Partners: • Conduct special training and information sessions through District workshops and other special regional gatherings • Distribute supportive materials, videos, and online information. UM Legacy Partners of The North Carolina Conference

Legacy Partners • Encourage congregations to elect a Legacy Leader as soon as possible. UM Legacy Partners of The North Carolina Conference

Legacy Partners • Utilize the second Sunday in September • as an annual Legacy Building Sunday: • Inspire and educate congregation members to make use of wills, bequests, life insurance and other planned gifts • Expand the mission and ministries of our church - locally, in our Conference, and worldwide. UM Legacy Partners of The North Carolina Conference

Planned Gift Examples UM Legacy Partners of The North Carolina Conference

Example 1: One of your church members approaches your pastor and wants to include your church in his or her will. The gift will be a parcel of land currently worth $250,000. Question: What should the pastor do? UM Legacy Partners of The North Carolina Conference

Example 2: One of your members approaches your pastor and wants to make an income-producing gift of an appreciated asset to the church. The $100,000 asset currently produces very little income. How can the donor receive additional income and make a gift? Question: What should the pastor do? UM Legacy Partners of The North Carolina Conference

Consideration: Does the church have the structure in place that allows the pastor to address these prospective donor questions? • If so, how can leaders help to ensure that the proposed Legacy gift fulfills both the requirements of the donor and of the church? UM Legacy Partners of The North Carolina Conference

If not, where can the pastor and church leaders get help? • What can the pastor and church leaders do to be prepared for inquiries from prospective Legacy donors? UM Legacy Partners of The North Carolina Conference

Planned Gift Overview UM Legacy Partners of The North Carolina Conference

For Planned (Deferred) Gifts, Donors Receive: • Satisfaction From Supporting a Favorite Church or Charity • Tax Advantages • Life Income • Income for Others UM Legacy Partners of The North Carolina Conference

Some Assets to Use for Gifts • Cash • Securities • Real Property • Personal Property • IRA’s and Retirement Plans • Life Insurance • Savings Bonds • Business Assets UM Legacy Partners of The North Carolina Conference

Some Types of Planned Gift • Life Income Plans • Bequests • Life Insurance • Retirement Plans • Life-estate Agreements • Revocable Living Reserved UM Legacy Partners of The North Carolina Conference

Some Life Income Plans • Charitable Gift Annuity • Charitable Remainder Unitrust UM Legacy Partners of The North Carolina Conference

Give Through a Charitable Gift Annuity • A Gift Annuity is a simple combination of two concepts: • A Charitable Gift,and • A guaranteed income for life - called anAnnuity UM Legacy Partners of The North Carolina Conference

Charitable Gift Annuity • Give an asset and receive income for the rest of your life • Receive current income tax deduction • Receive part of each payment tax free • Avoid some capital gains if funded using an appreciated asset • Avoid Probate Costs and Estate Taxes UM Legacy Partners of The North Carolina Conference

Current Gift Annuity Rates Source: American Council on Gift Annuities Age Number of Lives One Two 65 6.0% 5.6% 70 6.5 5.9 75 7.1 6.3 80 8.0 6.9 85 9.5 7.9 90 11.3 9.3 UM Legacy Partners of The North Carolina Conference

Gift Annuity Example Property $50,000 Cash Property $50,000 Remainder to Charity Income tax deduction of $20,465 may save $5,116. One Life Annuity of $3,600 for life. Tax-free amount $2,502. Estimated one life payout of $45,720. Effective rate 9.9%. After one life, property to charity. John Jones 76 (25% Tax Bracket) 7.2% Annuity UM Legacy Partners of The North Carolina Conference

Living Unitrust Life Income 6% Unitrust Trust Principal $200,000 Charity $321,687 Two Lives Increased income from trust $12,000. Effective rate 6.52%. Remainder to Charity. John Jones 65 Mary Jones 60 Property $200,000 Bypass of gain saves $32,000. Deduct $51,470. UM Legacy Partners of The North Carolina Conference

Give Through Your Will • A fixed amount • Designated property • A percentage of your estate • A residual bequest • A testamentary trust Each State has specific guidelines. UM Legacy Partners of The North Carolina Conference

Give Through Life Insurance • A paid-up policy • A policy on which you are still paying premiums • A new policy to benefit the charity • An existing policy naming the charity as a beneficiary UM Legacy Partners of The North Carolina Conference

Give Through Retirement Plans • IRA • 401 (K), 403 (B)… • Profit Sharing Plan • Tax Sheltered Annuity • Other UM Legacy Partners of The North Carolina Conference

Give Through Life Estate Reserved • Deed home, vacation home, or farm to charity • Take income tax deduction • Use property for remainder of donor’s life • Property passes to charity – no probate cost UM Legacy Partners of The North Carolina Conference

Home or Farm $200,000 Deed to Charity Trust Principal $200,000 Charity $200,000 Deed to charity. Retain right to use property. Two Lives Income tax ded. of $56,000. After two lives, property to charity. Life Estate Reserved John Jones 75 Mary Jones 70 UM Legacy Partners of The North Carolina Conference

Give Through a Revocable Living Trust • Allows one to change mind, to revoke a trust agreement • Can provide life income and serve gift intentions while in force • Provides flexibility with individuals and institutions during life • Takes precedence over will UM Legacy Partners of The North Carolina Conference

The Local Church Process UM Legacy Partners of The North Carolina Conference

What Does The Discipline Say? ¶ 2532.5: 1. Board of Trustees receives and administers all bequests and trusts, and invests all trust funds 2. Charge Conference can give notice to Board of Trustees that it is delegating responsibilities in 1. to the permanent endowment committee or to a local church foundation UM Legacy Partners of The North Carolina Conference

What Does The Discipline Say, cont’d? ¶ 2533: A charge conference may establish a permanent endowment fund committee (PEFC) with responsibilities to: 1. Provide services described in ¶ 2532.5 as designated by donor or charge conference. Encourages use of a UM foundation. 2. Charge conference shall adopt PEFC guidelines on planned giving and/or permanent endowment fund (including administration). UM Legacy Partners of The North Carolina Conference

What Does The Discipline Say, cont’d? ¶ 2533, cont’d: 3. Emphasize to the congregation the need for all adults to have a will and an estate plan 4. Stress the opportunities for church members and constituents to make provisions for giving through UM churches, institutions, agencies,and causes by means of wills, annuities, trusts, life insurance, memorials, and various types of property. UM Legacy Partners of The North Carolina Conference

What Does The Discipline Say, cont’d? ¶ 2533, cont’d: 5. Arrange for the dissemination of pre- retirement planning information: e.g., living will, living trust 6. Ensure PEFC members conform to charge conference actions, that members have no conflicts of interest, and that the permanent endowment document be changed to reflect any General Conference actions. UM Legacy Partners of The North Carolina Conference

What Does The Discipline Say, cont’d? ¶ 2533, cont’d: 7. Other responsibilities as determined by the charge conference 8. Resources for these tasks: UM foundations and development offices, National Association of UM Foundations, General Board of Discipleship, General Council on Finance and Administration, and other appropriate sources [e.g., UM Legacy Partners] UM Legacy Partners of The North Carolina Conference

What Does The Discipline Say, cont’d? ¶ 2534: Local Church Foundations Refer to Discipline text. UM Legacy Partners of The North Carolina Conference

Legacy Partners Proposed Process • Form a small ad hoc committee with the Legacy Leader as chairperson. Include staff and lay people. Determine the status of Legacy Giving in the congregation. • Are there one or more accounts holding legacy funds (from bequests, trusts, income producing gifts, etc.)? • If so, is use of the funds designated or undesignated? • How are the funds invested? • Have the donors' wishes been met? UM Legacy Partners of The North Carolina Conference

Proposed Process, cont’d • If the church has an endowment or legacy gifts committee, have that committee chairperson or a member of the committee be elected the Legacy Leader. • The named committee member would be responsible for interfacing with UMLP as he/she sees fit. • Additional responsibilities of the existing committee would be to work with UMLP to share successes in their church, to be a possible resource for others, and to consider additional ideas and expertise brought to the table by UMLP. UM Legacy Partners of The North Carolina Conference

Proposed Process, cont’d • Become educated about legacy giving through resources available from the United Methodist Foundation and UM Legacy Partners. • Draft a Legacy Program Charter for the church asking UMLP for help and using programs at other churches that have successful programs. UM Legacy Partners of The North Carolina Conference

Proposed Process, cont’d • Upon formulation of a final Legacy Program Charter proposal, take it to the appropriate approving bodies within the church (e. g., Finance Committee, Administrative Council, Charge Conference). • Begin implementing the approved plan, educating church members, etc. • (Again, with the help of Legacy Partners, if needed). UM Legacy Partners of The North Carolina Conference

Workshop and Discussion UM Legacy Partners of The North Carolina Conference

Legacy Giving in the Local Church United Methodist Legacy Partners of the